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

What do you mean by invisible export?

  1. Services

  2. Prohibited goods

  3. Unrecorded goods

  4. Economic goods

  5. Free goods
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A type of economic activity that is intangible, is not stored and does not result in ownership. A service is consumed at the point of sale.

Multiple choice

What is the difference between export and import of services called?

  1. Balance of trade

  2. Balance of capital account

  3. Balance of current account

  4. Balance of invisible

  5. Balance of payments
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The balance of trade is the official term for net exports that make up the balance of payments. The balance of trade can be a "favorable" surplus (exports exceed imports) or an "unfavorable" deficit (imports exceed exports). The official balance of trade is separated into the balance of merchandise trade for tangible goods and the balance of services.

Multiple choice

The European Economic and Monetary Union is an integral part of the

  1. Economic and Monetary Union

  2. European Union

  3. Not an integral part of any union

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

The Economic and Monetary Union (EMU) is a core component of the European Union, facilitating the use of the Euro and coordinating economic policies among member states.

Multiple choice

Super 301 envisages retaliatory action by the United States against countries it believes to be�

  1. incurring large external debts and failing in its debt repayment

  2. violating human rights

  3. against free enterpirse

  4. blocking free international trade practices
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Super 301 is a provision of the US Trade Act of 1974 that allows the United States to identify and take retaliatory action against countries that engage in unfair trade practices or block free international trade.

Multiple choice

Under new GATT agreements, textile trade related to Multi-Fibre Arrangement (MFA) has to be abolished within

  1. 5 years

  2. 10 years

  3. 15 years

  4. 20 years
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under new GATT agreements, textile trade related to Multi-Fibre Arrangement (MFA) has to be abolished within 10 years. At the General Agreement on Tariffs and Trade (GATT) Uruguay Round, it was decided to bring the textile trade under the jurisdiction of the World Trade Organization. The Agreement on Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the MFA. This process was completed on 1 January 2005. However, large tariffs remain in place on many textile products. 

Multiple choice

Some developed countries have suggested that in WTO negotiations process of determining 'Special Products' (SPs) should be made more transparent. In WTO terminology what are these special products?

  1. The products which developing countries are allowed to shield from formula tariff cuts.

  2. The products, which are normally imported by the developing countries

  3. Special products are those products which are highly perishable and cannot be preserved for a longer period. (fish, meat, milk, etc.)

  4. Products which are enjoying maximum subsidy by developed countries. Developing countries are not allowed to do that

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

In WTO negotiations, 'Special Products' are agricultural products that developing countries can exempt from tariff cuts to protect their food security and rural livelihoods.

Multiple choice

'Closed Economy' means an economy having

  1. exports only

  2. imports only

  3. no exports or imports

  4. controlled supply of money
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A closed economy is one that does not interact with other economies, meaning it has no imports or exports. It is self-sufficient and isolated from international trade.

Multiple choice

AGMARK is

  1. a seal put by ISI on manufactured goods

  2. a seal put by a government agency on certain imported goods

  3. a seal put by a government agency on certain agricultural products

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

AGMARK is a certification mark employed on agricultural products in India, ensuring that they conform to a set of standards approved by the Directorate of Marketing and Inspection.

Multiple choice

The term 'Third World' refers to

  1. developed countries

  2. under developed and developing countries

  3. oil rich countries

  4. Asian countries
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The term Third World was originally coined during the Cold War to describe countries that were not aligned with either the NATO bloc or the Soviet bloc, later evolving to refer to developing or underdeveloped nations.

Multiple choice

According to the WTO charter which among the following is not a benefit availed by is members?

  1. The member Governments are shielded from lobbying.

  2. Freer trade cuts the costs of living

  3. Trade Disputes are handled constructively

  4. Access to Foreign currency is made easier

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

The WTO charter focuses on trade rules, dispute settlement, and lowering trade barriers; it does not provide direct access to foreign currency for member governments.

Multiple choice

What is SAFTA?

  1. South African Free Trade Agency

  2. South Asian Free Trade Area

  3. South African Free Trade Association

  4. South American Free Trade Area
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

SAFTA stands for South Asian Free Trade Area, which is an agreement signed by the member states of the South Asian Association for Regional Cooperation (SAARC).