International Political Economy MCQs 2026

Economic sanctions are used to

1. A guarantee unconditional aid always ✓
2. B eliminate all economic contact with zero political aim ✓
3. C coerce target states by restricting trade or finance ✓
4. D only reward allies with extra trade always ✓

International Political Economy (IPE) studies

1. A only domestic poetry ✓
2. B interaction of politics and economics in global relations ✓
3. C only planetary astronomy only ✓
4. D only sports leagues only ✓

Mercantilism in IPE emphasizes

1. A laissez-faire free trade without state role ✓
2. B complete abolition of all commerce ✓
3. C accumulation of bullion and favourable balance of trade via state regulation ✓
4. D only cultural exchange without goods ✓

Economic liberalism in IPE supports

1. A autarky and closed borders always ✓
2. B complete state monopoly of all trade always ✓
3. C free trade and comparative advantage through market exchange ✓
4. D banning all foreign investment always ✓

Comparative advantage explains trade by

1. A differences in relative opportunity costs of production ✓
2. B identical costs in all countries always ✓
3. C only military power alone ✓
4. D only population size alone without productivity ✓

Neo-Marxism in IPE views global capitalism as

1. A harmonious win-win for all classes always ✓
2. B unrelated to imperial history ✓
3. C only about consumer fashion trends ✓
4. D structured by class conflict and exploitation across borders ✓

Dependency theory argues developing states remain dependent because

1. A they lack any natural resources always ✓
2. B core states extract resources and constrain peripheral industrialization ✓
3. C they trade too little with everyone ✓
4. D technology is identical globally always ✓

Imperialism in classical Marxist IPE (Lenin) links to

1. A pure free trade without power always ✓
2. B complete equality among nations always ✓
3. C monopoly capitalism and export of capital seeking profits abroad ✓
4. D absence of any banks or finance ✓

Hobson's critique of imperialism stressed

1. A purely cultural curiosity only ✓
2. B underconsumption and search for outlets for surplus capital ✓
3. C complete absence of economic motives ✓
4. D only religious missions without finance ✓

Complex interdependence (Keohane and Nye) suggests

1. A complete autarky always ✓
2. B multiple channels, issue asymmetry and reduced military salience among tied states ✓
3. C only one issue—security—matters always ✓
4. D zero transnational actors exist ✓

Hegemonic stability theory holds that

1. A a dominant liberal hegemon facilitates open trade and monetary order ✓
2. B weak states always create global order alone ✓
3. C closed blocs maximize stability always ✓
4. D trade needs no institutions ever ✓

Relative gains concern in IPE means states may cooperate less if

1. A absolute gains never matter ✓
2. B all states ignore power completely always ✓
3. C trade has no security externalities ever ✓
4. D partners gain more from exchange, affecting power balance ✓

Protectionism uses tools such as

1. A tariffs, quotas and subsidies to shield domestic industry ✓
2. B only free trade agreements without barriers ✓
3. C only cultural diplomacy alone ✓
4. D only space exploration funding only ✓

Free trade agreements aim to

1. A ban all cross-border exchange ✓
2. B reduce barriers and integrate markets among members ✓
3. C raise all tariffs uniformly ✓
4. D eliminate all governments ✓

Multinational corporations in IPE are significant because they

1. A operate only within one village always ✓
2. B never affect labour or environment ✓
3. C are identical to UN agencies ✓
4. D control cross-border production and influence host-state policy ✓

Sovereign debt crises in IPE raise issues of

1. A only cultural festivals ✓
2. B conditionality, austerity and lender-of-last-resort roles ✓
3. C only Olympic bidding ✓
4. D only local parking rules ✓

Structural power in IPE (Susan Strange) includes

1. A only military tanks alone ✓
2. B only ceremonial diplomacy alone ✓
3. C power to decide frameworks within which others must operate ✓
4. D only sports rules alone ✓

Bretton Woods (1944) established

1. A WTO and permanent floating rates immediately ✓
2. B IMF and World Bank and fixed exchange rate order ✓
3. C only NATO military command ✓
4. D only EU political union ✓

The Washington Consensus refers to

1. A market-oriented policy prescriptions for developing economies ✓
2. B socialist central planning only ✓
3. C complete trade autarky globally ✓
4. D abolition of all private property worldwide ✓

Globalization in IPE implies

1. A increased flows of goods, capital, information and people across borders ✓
2. B complete isolation of all states ✓
3. C end of all technology transfer ✓
4. D zero cross-border finance ever ✓

Terms of trade for primary exporters concern

1. A only military alliances ✓
2. B price of exports relative to imports affecting development prospects ✓
3. C only embassy staffing levels ✓
4. D only anthem lyrics ✓

Prebisch–Singer hypothesis suggests

1. A manufactures always fall in price forever ✓
2. B trade always benefits periphery most ✓
3. C primary commodity terms of trade deteriorate over time for periphery ✓
4. D technology never changes ✓

Foreign direct investment (FDI) involves

1. A only short-term stock speculation without control always ✓
2. B lasting interest and control in enterprises abroad ✓
3. C only tourist travel without business ✓
4. D only foreign aid grants without ownership ✓

Structural adjustment programmes often require

1. A unlimited money printing without reforms ✓
2. B fiscal austerity, privatization and market liberalization in borrowing states ✓
3. C complete trade autarky as condition always ✓
4. D abolition of all international lenders only ✓

Trade openness index measures

1. A only military spending share ✓
2. B only population density ✓
3. C exports plus imports relative to GDP ✓
4. D only forest cover alone ✓

Capital flight harms developing economies by

1. A always increasing domestic investment ✓
2. B draining investable resources and weakening currency ✓
3. C guaranteeing stable growth always ✓
4. D having no macroeconomic effect ever ✓

WTO dispute settlement differs from GATT era by having

1. A no rules on trade at all ✓
2. B only advisory opinions without effect ✓
3. C more binding adjudication and enforcement mechanisms ✓
4. D only bilateral duels without panels ✓

New International Economic Order (1970s) demanded

1. A permanent Western monopoly without change ✓
2. B abolition of all trade forever ✓
3. C more equitable global economic rules favouring developing states ✓
4. D ignore commodity price issues completely ✓

Imperialism of free trade (Gallagher and Robinson) suggests

1. A informal economic dominance can substitute formal colonial rule ✓
2. B colonies were irrelevant to British power always ✓
3. C trade never accompanied gunboats ✓
4. D empire ended before industrialization ✓

Triad in IPE often denotes

1. A only three villages in one country ✓
2. B only OPEC members exclusively ✓
3. C only landlocked African states only ✓
4. D North America, Europe and Japan as core advanced economies ✓

Race to the bottom in IPE refers to

1. A universal rise in labour protections always ✓
2. B fixed global minimum wage by UN law always ✓
3. C absence of any investment flows ✓
4. D competition to lower standards to attract investment ✓

Global value chains mean production is

1. A always done in one factory locally always ✓
2. B unrelated to trade statistics ✓
3. C immune to politics entirely ✓
4. D split across countries in sequential stages ✓

Economic statecraft uses

1. A only military parades without finance ✓
2. B only sports without policy ✓
3. C economic tools to achieve political and security objectives ✓
4. D only weather control fiction ✓

Belt and Road Initiative reflects

1. A China's infrastructure-led connectivity and investment diplomacy ✓
2. B US Marshall Plan of 1948 identically ✓
3. C complete withdrawal from trade ✓
4. D only cultural exchange without projects ✓

CPEC in Pakistan's IPE context is

1. A a major China–Pakistan economic corridor of infrastructure and energy projects ✓
2. B a NATO military pact only ✓
3. C an EU membership treaty ✓
4. D a Antarctic research station only ✓

South–South cooperation in IPE emphasizes

1. A exclusive reliance on former colonial powers only ✓
2. B complete isolation among Global South ✓
3. C developing states collaborating on trade, aid and technology ✓
4. D only military blocs in Europe ✓

Digital trade and e-commerce in IPE raise

1. A no cross-border data flows ever ✓
2. B data localization, taxation and platform regulation issues ✓
3. C only 19th-century tariff schedules apply ✓
4. D zero need for new rules ✓

Fair trade movement seeks to

1. A improve producer wages and conditions through certified ethical trade ✓
2. B maximize only cheapest labour costs always ✓
3. C abolish all international commerce ✓
4. D ignore consumer information completely ✓

Offshore financial centres in IPE enable

1. A only transparent public accounting always ✓
2. B zero cross-border capital flows ✓
3. C only subsistence farming ✓
4. D tax avoidance, secrecy and regulatory arbitrage ✓

Trade deficit means

1. A exports exceed imports always ✓
2. B no foreign trade occurs ✓
3. C government budget is always balanced ✓
4. D imports of goods and services exceed exports ✓

Balance of payments records

1. A only military troop counts ✓
2. B only cultural exports without finance ✓
3. C only domestic GDP without external sector ✓
4. D all economic transactions between a country and the world ✓

Currency hegemony refers to

1. A equal use of all currencies always with no leader ✓
2. B absence of foreign exchange markets ✓
3. C dominance of one currency (e.g., US dollar) in trade and reserves ✓
4. D only barter globally ✓

Transnational relations in IPE include roles of

1. A MNCs, NGOs and cross-border networks beyond states alone ✓
2. B only heads of state at summits ✓
3. C only municipal mayors without external ties ✓
4. D only ancient empires without firms ✓

Embedded liberalism (Ruggie) described post-1945 compromise as

1. A pure laissez-faire without social policy ✓
2. B complete closed economies globally ✓
3. C abolition of all multilateral bodies ✓
4. D open trade combined with domestic welfare safeguards ✓

Neo-liberal institutionalism in IPE argues institutions

1. A reduce transaction costs and enable cooperation despite anarchy ✓
2. B never matter in world politics ✓
3. C replace all states completely ✓
4. D eliminate power asymmetries entirely ✓

Comparative vs absolute advantage: Ricardo focused on

1. A only absolute productivityLead in all goods required to trade ✓
2. B banning imports always ✓
3. C military conquest as trade substitute always ✓
4. D relative efficiency differences driving mutually beneficial trade ✓

Most favoured nation (MFN) status means

1. A trade advantages granted to one partner must extend to others ✓
2. B exclusive discrimination against all partners ✓
3. C complete trade embargo ✓
4. D zero tariffs only for military allies without rule ✓

Infant industry argument justifies

1. A temporary protection to nurture new domestic industries ✓
2. B permanent autarky without any goal ✓
3. C free trade with zero exceptions always ✓
4. D banning all learning and technology ✓

Resource curse thesis argues resource wealth may

1. A automatically create stable democracy always ✓
2. B undermine institutions and development through rent-seeking ✓
3. C guarantee industrialization always ✓
4. D have no political effects ever ✓