Economics ยท General Awareness

International Trade Economics

2,124 Questions

International trade economics covers the exchange of goods and services across borders, encompassing theories like comparative advantage and policies such as tariffs. Key concepts include the balance of payments, free trade agreements, and globalization measures. These topics are frequently asked in UPSC, State PSC, and other competitive exams to test economic awareness.

Balance of paymentsTrade policy and tariffsFree trade agreementsComparative advantage theory

International Trade Economics Questions

Multiple choice

What is the term used to describe the total value of a country's exports and imports?

  1. Balance of trade

  2. Current account deficit

  3. Trade surplus

  4. Total trade
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total trade refers to the total value of a country's exports and imports.

Multiple choice

Which of the following is NOT a type of export promotion program?

  1. Export subsidies

  2. Trade missions

  3. Export credit insurance

  4. Import substitution
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Import substitution is a strategy aimed at reducing a country's reliance on imports, not promoting exports.

Multiple choice

What is the term used to describe the difference between a country's total exports and its total imports?

  1. Balance of trade

  2. Current account deficit

  3. Trade surplus

  4. Foreign exchange reserves
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Balance of trade refers to the difference between a country's total exports and its total imports.

Multiple choice

What is the term used to describe the process of selling goods and services to other countries?

  1. Exporting

  2. Importing

  3. Trading

  4. Globalization
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Exporting refers to the process of selling goods and services to other countries.

Multiple choice

How do developed countries typically regulate FDI?

  1. Through foreign investment laws and regulations

  2. By establishing investment promotion agencies

  3. By negotiating bilateral investment treaties

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Developed countries typically regulate FDI through a combination of foreign investment laws and regulations, establishing investment promotion agencies, and negotiating bilateral investment treaties.

Multiple choice

Which developed country is the largest recipient of FDI globally?

  1. United States

  2. United Kingdom

  3. Japan

  4. Germany
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The United States is the largest recipient of FDI globally, attracting a significant share of FDI inflows due to its large and diverse economy, strong infrastructure, and favorable investment climate.

Multiple choice

How does FDI impact the trade balance of developed countries?

  1. It can lead to an increase in imports

  2. It can lead to an increase in exports

  3. It can lead to a decrease in both imports and exports

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

FDI can lead to an increase in exports from developed countries as foreign companies may use their facilities in these countries to produce goods for export.

Multiple choice

Which of the following is not a type of regulatory instrument used in Bangladesh?

  1. Licenses

  2. Permits

  3. Quotas

  4. Tariffs
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Tariffs are not a type of regulatory instrument used in Bangladesh.

Multiple choice

How does agriculture contribute to the foreign exchange earnings of a country?

  1. By exporting agricultural products

  2. By importing agricultural products

  3. By providing raw materials for industries

  4. By creating employment opportunities
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Agriculture contributes to the foreign exchange earnings of a country by exporting agricultural products to other countries, thereby generating revenue in foreign currency.

Multiple choice

How can a country increase its agricultural exports?

  1. By increasing production

  2. By improving the quality of agricultural products

  3. By promoting agricultural products in international markets

  4. By all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A country can increase its agricultural exports by increasing production, improving the quality of agricultural products, and promoting agricultural products in international markets.

Multiple choice

How does war affect international trade?

  1. Increases

  2. Decreases

  3. Remains unchanged

  4. Varies depending on the war
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

War often leads to disruptions in international trade due to blockades, sanctions, and other restrictions.

Multiple choice

What is the term used to describe the phenomenon where countries with a common language tend to trade more with each other?

  1. Language gravity model

  2. Language trade bloc

  3. Language economic integration

  4. Language preferential trade agreement
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The language gravity model suggests that countries with a shared language have a stronger tendency to engage in trade with each other.

Multiple choice

Which of the following is an example of a language-based trade bloc?

  1. European Union

  2. North American Free Trade Agreement (NAFTA)

  3. Association of Southeast Asian Nations (ASEAN)

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Language-based trade blocs, such as the European Union, NAFTA, and ASEAN, promote economic integration among countries with shared languages.

Multiple choice

What is the maximum value of goods that can be imported into Egypt without paying customs duties?

  1. EGP 1,000

  2. EGP 2,000

  3. EGP 3,000

  4. EGP 4,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The maximum value of goods that can be imported into Egypt without paying customs duties is EGP 3,000.

Multiple choice

The Law of One Price states that:

  1. A commodity should have the same price in all markets.

  2. The price of a commodity is determined by its supply and demand.

  3. The price of a commodity is influenced by government regulations.

  4. The price of a commodity is unaffected by transportation costs.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Law of One Price suggests that, in the absence of market imperfections, a commodity should trade at the same price in different markets.