Q.1 What does 'International Political Economy' (IPE) primarily study?
Only domestic politics
The interaction of politics and economics on a global scale
Military strategies between nations
Cultural exchanges between societies
Explanation - IPE examines how international politics and economics interact, including trade, finance, and development.
Correct answer is: The interaction of politics and economics on a global scale
Q.2 Which institution was established in 1944 to promote international monetary cooperation?
United Nations
World Trade Organization
International Monetary Fund
European Union
Explanation - The IMF was created to stabilize exchange rates and provide short-term loans to countries facing balance of payments problems.
Correct answer is: International Monetary Fund
Q.3 What is 'mercantilism' in IPE?
Free trade without tariffs
Maximizing exports and minimizing imports
Privatization of industries
Complete economic isolation
Explanation - Mercantilism views wealth as finite and emphasizes trade surpluses to accumulate wealth and power.
Correct answer is: Maximizing exports and minimizing imports
Q.4 Which theory emphasizes the role of free markets and minimal state intervention?
Marxism
Liberalism
Mercantilism
Realism
Explanation - Liberalism in IPE supports free trade, open markets, and limited government interference in the economy.
Correct answer is: Liberalism
Q.5 The World Bank was originally established to focus on:
Post-war reconstruction
Military alliances
Space exploration
Cultural cooperation
Explanation - The World Bank was initially set up to fund the reconstruction of Europe after WWII before focusing on global development projects.
Correct answer is: Post-war reconstruction
Q.6 What does WTO stand for?
World Trade Organization
World Transportation Office
Western Treaty Organization
World Tourism Office
Explanation - The WTO regulates international trade rules and resolves disputes between member states.
Correct answer is: World Trade Organization
Q.7 Which concept explains how some countries dominate and exploit others economically?
Dependency theory
Game theory
Behavioralism
Functionalism
Explanation - Dependency theory argues that resources flow from poorer 'periphery' states to richer 'core' states, reinforcing inequality.
Correct answer is: Dependency theory
Q.8 What is 'comparative advantage' in trade?
Ability to produce more of everything
Producing goods at lower opportunity cost
Restricting imports
Accumulating gold reserves
Explanation - Comparative advantage explains that countries should specialize in producing goods they can make relatively more efficiently.
Correct answer is: Producing goods at lower opportunity cost
Q.9 Which economist is most associated with the concept of 'invisible hand'?
Karl Marx
John Maynard Keynes
Adam Smith
David Ricardo
Explanation - Adam Smith’s 'invisible hand' concept emphasizes the self-regulating nature of markets.
Correct answer is: Adam Smith
Q.10 The Bretton Woods Conference took place in:
1919
1944
1961
1989
Explanation - The Bretton Woods Conference in 1944 created the IMF and World Bank, shaping post-war economic order.
Correct answer is: 1944
Q.11 Which term describes the outsourcing of production to other countries?
Globalization
Protectionism
Nationalization
Autarky
Explanation - Globalization includes economic integration and outsourcing production across borders for efficiency.
Correct answer is: Globalization
Q.12 Which organization replaced GATT in 1995?
United Nations
World Trade Organization
OECD
NATO
Explanation - WTO succeeded GATT to enforce stronger trade rules and dispute settlement mechanisms.
Correct answer is: World Trade Organization
Q.13 In IPE, 'realism' emphasizes:
Economic interdependence
Power and national interests
Global cooperation
Cultural integration
Explanation - Realists focus on how states use economic tools to pursue power and security.
Correct answer is: Power and national interests
Q.14 Which agreement established rules for international trade in goods post-WWII?
NAFTA
WTO
GATT
EU
Explanation - The General Agreement on Tariffs and Trade (GATT) regulated international trade before being replaced by the WTO.
Correct answer is: GATT
Q.15 Which concept critiques globalization as benefiting wealthy nations disproportionately?
Free trade theory
Dependency theory
Liberalism
Functionalism
Explanation - Dependency theory sees globalization as reinforcing inequalities between developed and developing nations.
Correct answer is: Dependency theory
Q.16 What does 'protectionism' mean?
Promoting free trade
Restricting trade through tariffs and quotas
Encouraging outsourcing
Liberalizing markets
Explanation - Protectionism involves using tariffs, quotas, or regulations to shield domestic industries from foreign competition.
Correct answer is: Restricting trade through tariffs and quotas
Q.17 Which economist developed the theory of 'comparative advantage'?
Adam Smith
David Ricardo
Karl Marx
John Locke
Explanation - Ricardo’s theory of comparative advantage explains why nations should specialize and trade based on efficiency differences.
Correct answer is: David Ricardo
Q.18 Which global crisis in 2008 highlighted the interdependence of financial markets?
Asian Financial Crisis
Great Depression
Global Financial Crisis
Oil Crisis
Explanation - The 2008 crisis showed how failures in the U.S. housing market spread worldwide, impacting global economies.
Correct answer is: Global Financial Crisis
Q.19 What is 'hegemonic stability theory' in IPE?
World order requires a dominant power to enforce rules
All states are equally powerful
Economic crises stabilize politics
Markets regulate themselves without states
Explanation - Hegemonic stability theory suggests that a dominant power provides stability to the international economic system.
Correct answer is: World order requires a dominant power to enforce rules
Q.20 Which regional trade agreement includes the US, Canada, and Mexico?
EU
NAFTA
ASEAN
OPEC
Explanation - NAFTA, signed in 1994, created a free-trade zone between the US, Canada, and Mexico.
Correct answer is: NAFTA
Q.21 What is 'tariff' in international trade?
A ban on trade
A tax on imports or exports
A free trade agreement
A subsidy for exporters
Explanation - Tariffs are taxes placed on goods crossing borders, used for revenue or protecting domestic industries.
Correct answer is: A tax on imports or exports
Q.22 Which school of thought in IPE emphasizes class struggle and exploitation?
Realism
Marxism
Liberalism
Institutionalism
Explanation - Marxist IPE focuses on capitalism’s role in creating global inequality and class conflict.
Correct answer is: Marxism
Q.23 Which of the following is NOT a role of the IMF?
Providing short-term loans
Stabilizing exchange rates
Promoting free trade agreements
Monitoring economic policies
Explanation - The IMF focuses on monetary stability and loans, while trade agreements are managed by the WTO.
Correct answer is: Promoting free trade agreements
Q.24 Which event led to the collapse of the Bretton Woods fixed exchange rate system?
Oil crisis of 1973
US abandoning the gold standard in 1971
Fall of the Soviet Union
Creation of the Euro
Explanation - The US decision to end gold convertibility caused the Bretton Woods system of fixed exchange rates to collapse.
Correct answer is: US abandoning the gold standard in 1971
Q.25 What is 'foreign direct investment' (FDI)?
Short-term portfolio investment
Investment by a company in another country’s business assets
International loans
Government aid programs
Explanation - FDI involves long-term investments, like building factories or acquiring firms in another country.
Correct answer is: Investment by a company in another country’s business assets