Mercantilism and International Trade Quiz

Who is considered the systematic formulator of mercantilism?

• Karl Marx

• Antonio Serra

• Adam Smith

• David Ricardo

What served as the exclusive medium of exchange for trade among nations during the era of mercantilism?

• Paper Money

• Copper and Bronze

• Gold and Silver

• Barter System

According to the theory of mercantilism, a nation should aim to boost its wealth and enhance its power by promoting:

• Exports and Limiting Imports

• Imports and Limiting Exports

• Free Trade Agreements

• Imports and Exports

What is the primary objective of a nation according to mercantilism?

• To promote international cooperation

• To uphold a favourable balance of trade

• To eliminate all imports

• To accumulate natural resources

According to mercantilism, what constitutes the wealth of a nation?

• Foreign Investments

• Human-made and natural resources

• Gold, Silver, and other precious metals

• Technology and Innovation

Who put forward the theory of absolute advantage in international trade?

• David Ricardo

• Adam Smith

• Karl Marx

• Antonio Serra

When does a country have an absolute advantage in the production of a commodity?

• When it has a deficit of the commodity

• When it has a surplus of the commodity

• When it can produce the commodity at a lower cost than another country

• When it can produce the commodity at a higher cost than another country

According to Adam Smith, how can both nations benefit by specializing in the production of their most efficient commodity?

• By increasing tariffs on imports

• By implementing non-tariff barriers

• By decreasing subsidies for exports

• By exchanging a portion of their output with the other nation

What does the theory of absolute advantage optimize?

• Resource Utilisation

• Government Intervention

• Treasure Accumulation

• Trade Barriers

What may the advantage that one country possesses over another be according to Adam Smith?

• Inherited or Borrowed

• Artificial or Synthetic

• Natural or Acquired

• Manufactured or Assembled