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 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

The Exim Policy of 1992-97 was announced in ____________.

  1. March 1991

  2. March 1992

  3. April 1991

  4. April 1992
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Export-Import (Exim) Policy of 1992-97 was a significant reform announced in March 1992 to liberalize India's foreign 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

________ 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 Exim Policy for 1997-2000 was effective on ________.

  1. 1st May, 1996

  2. 1st April, 1997

  3. 26th June, 1996

  4. 26th June, 1997
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Exim Policy for 1997-2000 was officially launched and became effective on April 1, 1997.

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.

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

Export promotion was a key element of the foreign trade strategy during the _______.

  1. seventh Five Year Plan

  2. eighth Five Year Plan

  3. nineth Five Year Plan

  4. tenth Five Year Plan
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Export promotion became a significant focus of India's foreign trade strategy during the Eighth Five Year Plan (1992-1997).

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 important components of foreign trade of a country are _________.

  1. terms of trade, balance of trade and balance of payment

  2. the volume of trade, the composition of trade and the direction of trade

  3. terms of trade and the volume of trade

  4. terms of trade and the direction of trade
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The three fundamental components used to analyze a country's foreign trade are the volume (how much), the composition (what goods), and the direction (to/from whom).

Multiple choice geography trade in agricultural produce (part - a) trade in tamil nadu trade in agricultural produce - i human geography in tamil nadu

When the relationship between countries is good, then the trade will _____.

  1. Fair bad

  2. Flourish well

  3. Remain constant

  4. Will get badly affected
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When the relationship between countries is good, then the trade will flourish well, as the countries will understand each other better when there are good relations.

Multiple choice geography trade in agricultural produce (part - a) trade in tamil nadu trade in agricultural produce - i human geography in tamil nadu

Why densely populated countries have less international trade?

  1. Because production is less

  2. Because country is not developed

  3. Because domestic consumption is high

  4. Because international demand is weak
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • Densely populated countries have less international trade because domestic consumption is high and there is not much surplus left.
Multiple choice geography trade in agricultural produce (part - a) trade in tamil nadu trade in agricultural produce - i human geography in tamil nadu

_____ decides the economic growth of a country.

  1. Trade

  2. Export

  3. Import

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

A basic economic concept which involves the buying and selling of goods and services with compensation paid by a buyer to a seller, or the exchange of goods or services between parties is known as trade. The most common medium of exchange for these transactions is money. Trade decides the economic growth of a country as it increases the income of a country and provide occupation to a large population.