Economics · 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

Entrepot Trade refers to

  1. Purchase of goods from foreign countries

  2. Importing goods from foreign countries for the purpose of exporting them to a foreign country

  3. Sale of goods to foreign countries

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

Right answer because it is known as entrepot trade in which goods are imported from foreign countries not for domestic consumption, but for exporting them to a foreign country. For instance gems and jewellery is imported from America and exported to Sri Lanka.

Multiple choice

Which of the following is not an auxillary to trade?

  1. Transport

  2. Insurance

  3. Packaging

  4. Industry

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Right answer because industry refers to the production of goods through the utlilisation of various resources. It is not auxillary to trade. But in industry, goods are produced. In trade those goods are distributed ( sale and purchase ) of goods.

Multiple choice

The balance of payment comprises

  1. a current account of goods and services only

  2. a capital account of financial assets only

  3. official settlement accounts only

  4. all of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Balance of Payments (BoP) is a comprehensive record of all economic transactions between residents of a country and the rest of the world, including the current account, capital account, and financial account.

Multiple choice

Of the following which is the main course for the progress of Internationalism in the world?

  1. Growing trade competition among the nations

  2. Race of supremacy among the nations

  3. Opposition to the establishment of world government

  4. Growing interdependence of the nation on one another in the field of education, trade and technology
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Internationalism is fostered by the increasing connectivity and reliance between nations. Global challenges and opportunities in trade, technology, and education require cooperative frameworks rather than isolation.

Multiple choice

The President of Brazil was on a visit to India in 2007 where he signed several trade agreements. Which of the following has been the major area of trade relations between the two countries?

  1. Oil exploration

  2. Supply of agro products

  3. Production of nuclear fuel

  4. Import of electronic goods

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

During the 2007 visit of the Brazilian President to India, trade relations were heavily focused on energy security, specifically oil exploration and cooperation in the hydrocarbon sector. This was a significant strategic partnership established during that period.

Multiple choice

Government Policy includes

  1. Price Policy

  2. Trade and Marketing Policy

  3. Packing Policy

  4. Industrial Policy

  5. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Industrial policy is a standard example of government policy that affects business operations. The other options listed are specific functional policies within a firm rather than government-level policies.

Multiple choice

Current A/C of BOP doesn’t include

  1. balance of trade

  2. balance of service

  3. balance of unilateral transfers

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

 Balance of current a/c is a broader concept than the balance of trade. It includes balance of services and unilateral transfer.

All the earnings and expenditure by way of exports and imports, transfers like remittances and donations, etc. form part of the current account of BOP while foreign investments (direct and portfolio), commercial borrowings, NRI deposits, etc. form part of the capital account of BOP.

Multiple choice

Directions: Read the passages carefully and complete the statement given underneath by choosing the appropriate option from the following.

In 1964 the United Nations Conference on Trade and Development was held. For the first time the poorer nations of the world came together to act as a pressure group on trading matters. The Conference made the following recommendations. The Developing countries should be given free access to world markets for their manufactures and semi manufactures by the elimination of quotas and tariffs. International commodity agreements should be made for each major primary commodity in world trade to stabilise commodity prices. Moreover, compensation schemes, whereby the underdeveloped countries are compensated for the declining prices of their primary products, were recommended for consideration. The Conference also resolved that the developed countries should aim to provide at least 1 per cent of their national income as aid for the underdeveloped countries.

As can be understood from the passage, the 1964 United nations Conference on Trade and Development was remarkable because ______________.

  1. the developing countries now had the chance, for the first time, to have free access to the markets of the developed countries.

  2. it failed to formulate a policy that would ensure the stabilisation of world commodity prices.

  3. all the demands of the underdeveloped countries were accepted without reservation by the developed countries.

  4. a number of deadlines were set for the signing of international commodity agreements.

  5. the world's poorer countries participating in the Conference took joint action to influence the resolutions on trading matters
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

   For the first time the poorer nations of the world came together to act as a pressure group on trading matters.

Multiple choice

Directions: Read the passages carefully and complete the statement given underneath by choosing the appropriate option from the following.

In 1964 the United Nations Conference on Trade and Development was held. For the first time the poorer nations of the world came together to act as a pressure group on trading matters. The Conference made the following recommendations. The Developing countries should be given free access to world markets for their manufactures and semi manufactures by the elimination of quotas and tariffs. International commodity agreements should be made for each major primary commodity in world trade to stabilise commodity prices. Moreover, compensation schemes, whereby the underdeveloped countries are compensated for the declining prices of their primary products, were recommended for consideration. The Conference also resolved that the developed countries should aim to provide at least 1 per cent of their national income as aid for the underdeveloped countries.

From the passage we learn that one of the resolutions adopted by the United Nations Conference on Trade and Development ______________.

  1. was soon revoked due to strong pressure coming from underdeveloped member countries.

  2. considerably raised the world trade tariffs on a variety of commodities.

  3. concerned the amount of aid to be given by the developed countries to the underdeveloped.

  4. envisaged a step-by-step lifting of the world's trade barriers.

  5. made it imperative for the developed countries to open up their markets to the manufactured goods of the underdeveloped countries
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

   The Conference also resolved that the developed countries should aim to provide at least 1 per cent of their national income as aid for the underdeveloped countries.

Multiple choice

The General Assembly voted overwhelmingly to condemn the U.S. trade embargo against Cuba recently. Which of the following statements about Cuba is/are correct? I.          The resolution passed by the General Assembly is non-binding II.         187 countries voted in support, three opposed and two abstained III.        Barack Obama announced the lifting of US trade embargo against Cuba in 2010

  1. I only

  2. I and II only

  3. II and III only

  4. III only
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Barack Obama extended the US trade embargo against for another year in September 2009