Lesson 3.8.1

3.8.1 International trade and free trade Quiz: OCR Business, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.8.1, International trade and free trade: 20 multiple choice questions for the OCR Business (H431), Unit 3: External influences, written with Revision Ninja.

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The 20 questions

  1. What is a tax imposed by a government on imported goods called?

    • Tariff
    • Embargo
    • Quota
    • Subsidy

  2. What term describes a physical limit on the quantity of a product imported?

    • Import quota
    • Export subsidy
    • Import tariff
    • Trade embargo

  3. What term describes government policies designed to restrict trade to protect domestic firms?

    • Protectionism
    • Free trade
    • Globalisation
    • Liberalisation

  4. What is international trade conducted without any tariffs, quotas, or restrictions called?

    • Bilateral trade
    • Free trade
    • Protected trade
    • Fair trade

  5. What is financial support given by a government to domestic producers to lower costs?

    • Tax allowance
    • Fine
    • Tariff
    • Subsidy

  6. What is a group of countries that agree to reduce trade barriers together called?

    • Cartel
    • Trade bloc
    • Monopoly
    • Trade union

  7. Which agreement allows free movement of goods, services, capital, and labour between countries?

    • Preferential area
    • Single market
    • Free trade area
    • Customs union

  8. Which economic theory suggests countries should specialise based on lower opportunity cost?

    • Economies of scale
    • Comparative advantage
    • Absolute advantage
    • Purchasing power

  9. If the UK government imposes a tariff on imported steel, what happens to import prices?

    • Prices decrease
    • Prices fall sharply
    • Prices increase
    • Prices stay unchanged

  10. If the British pound depreciates against other currencies, what happens to UK export competitiveness?

    • Competitiveness increases
    • Competitiveness decreases
    • Competitiveness vanishes
    • Competitiveness stays same

  11. Why might a developing country impose temporary protectionist measures on a new domestic industry?

    • To boost tax
    • To lower prices
    • To prevent failure
    • To increase imports

  12. What term describes selling goods in a foreign market below their cost of production?

    • Dumping
    • Hedging
    • Outsourcing
    • Offshoring

  13. Which measure is an example of an administrative or non-tariff trade barrier?

    • Strict safety regulations
    • Import tax
    • Export tariff
    • Value added tax

  14. How does entry into a free trade area directly benefit domestic manufacturing businesses?

    • Strict trade quotas
    • Reduced local demand
    • Higher import taxes
    • Larger target market

  15. A UK firm imports materials from Europe. What happens to costs if the pound appreciates?

    • Costs stay constant
    • Costs double
    • Costs rise
    • Costs fall

  16. What distinguishes a customs union from a simple free trade area?

    • Common external tariff
    • Common currency
    • Fixed exchange rates
    • Free labour movement

  17. What is a major risk when a country unilaterally increases tariffs on foreign imports?

    • Increased global trade
    • Lower local taxes
    • Retaliatory tariffs
    • Lower domestic inflation

  18. Why do domestic consumers generally benefit from international free trade policies?

    • Cheaper goods
    • Higher prices
    • Less choice
    • Higher tariffs

  19. What is a complete government ban on trading with a specific foreign country called?

    • Import subsidy
    • Voluntary restraint
    • Preferential tariff
    • Trade embargo

  20. Which global organisation oversees international trade rules and mediates trade disputes between member nations?

    • World Bank
    • United Nations
    • International Monetary Fund
    • World Trade Organization

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