Economics · General Awareness

International Trade Economics

2,022 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 history polity and society in post-mauryan period trade between tamizhagam and rome kushans, sakas and hunas post mauryan india

Being Muslim as a Southeast Asian merchant _______________________.

  1. was against the law in most trading cities.

  2. entitled the merchant to better interest rates when doing business in Muslim Asia.

  3. was compulsory in order to do business in Malaka.

  4. was often an advantage when dealing with Muslim Indian traders.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In the context of historical maritime trade in Southeast Asia, Muslim merchants often shared a common religious and legal framework with other Muslim traders in the Indian Ocean, which facilitated trust and business relations.

Multiple choice business organisation and correspondence components of business studies factors affecting business interrelationship between industry, commerce and trade other aspects of a business

Singapore and Middle East countries are the best examples for entrepot trade.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Singapore and Middle East countries are the best examples for entrepot trade- this is a true statement. Entrepot is mainly used to refer to duty-free ports with the high volume or re-export. At entrepot, goods do not face any import or export duties upon shipment from the port.

Multiple choice economics government budget and economy trade deficits, savings and investment public finance and budget public finance, taxes and budget

Adverse balance of payment can be corrected through _________.

  1. more export

  2. import ban

  3. devaluation of currency

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

An adverse balance of payment can be addressed by increasing exports, restricting imports, or devaluing currency to make exports cheaper and imports more expensive.

Multiple choice economics government budget and economy trade deficits, savings and investment public finance and budget public finance, taxes and budget

When a country's imports are higher than its exports, the balance is termed as ___________.

  1. trade deficit

  2. trade inflow

  3. income deficit

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a country's imports are higher than its exports, the value of goods coming in exceeds the value of goods going out, resulting in a trade deficit.

Multiple choice economics government budget and economy trade deficits, savings and investment public finance and budget public finance, taxes and budget

Trade deficit is a situation where:

  1. a country's exports exceeds its imports.

  2. a country's imports exceeds its exports.

  3. there is depreciation of the currency

  4. the government fails
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A trade deficit is defined as the situation where the value of a country's imports exceeds the value of its exports.

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

Foreign trade involves much greater risk than home trade.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • Economic dependence: Too much dependence on imports may undermine the economy of a country.
  • Restricted growth of home industries: Foreign trade may discourage the growth of domestic industries.
  • Misuse of natural resources.
  • Political exploitation.
  • Import of harmful goods.
  • Rivalry among nations.
  • Invasion of culture.
Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

Example of external trade is _______.

  1. goods produced in India and sold in Australia

  2. goods produced in India and sold in India

  3. goods produced in Australia and sold in India

  4. A and C
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

External trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP).

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

Internal trade differs from external trade in which of the following ways?

  1. Nationality of buyers and sellers

  2. Political system and risks

  3. Mobility of factors of production

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

Trade is the central activity in the economy. Trade not only refers to the exchange of goods and services within the country but also between two or more countries.Internal trade refers to the trade within the borders of the country. External Trade refers to the trade between two or more countries.

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

________ is/are the business regulation(s) and policy(ies) which differentiate(s) internal trade with external trade.

  1. Tariff and taxation

  2. Import quota system

  3. Subsidies

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

Internal trade is generally free from the complex regulations, tariffs, and quotas that govern external (international) trade. All listed items are standard tools used to regulate international trade.

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

Which of the following is/are the characteristic(s) of international trade?

  1. Territorial specialization

  2. Separation of sellers from buyers

  3. Mutually acceptable currency

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

International trade is lower costs to consumers. The lower cost is the result of two factors. First, companies can produce items overseas, saving money on labor and material costs.

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

The Principal instrument of inward-oriented trade policy is __________.

  1. Non Protection

  2. Protection

  3. Tariff

  4. Customs duty
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Inward-oriented trade policy, also known as import substitution, relies on protecting domestic industries from foreign competition through various measures.

Multiple choice commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

The inward-oriented trade policy is also known as _____________.

  1. Export promotion strategy

  2. Import substitution strategy

  3. LPG

  4. Exim policy
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Inward-oriented trade policy focuses on producing goods domestically that were previously imported, hence the term import substitution strategy.