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 business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Giving excess protection to domestic markets, which have high entry barriers for foreign firms, over valuation of exchange indicates the adoption of _________ by the country?

  1. Inward oriented strategy

  2. Inflation control

  3. Liberalization

  4. Outwards oriented strategy

  5. Export promotion strategy
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Identify the merit(s) of Trade credit.

  1. It reduces the capital requirement.

  2. It helps the business focus on core activities.

  3. It does not require any negotiation or formal agreement.

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

Trade credit can be defined as delay of payment permitted by the creditor or supplier of raw materials, consumables etc. against the goods purchased from him. Merits of Trade credit are:a) It reduces the capital requirement.b) It helps the business focus on core activities.

c) It does not require any negotiation or formal agreement.

Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Likely disadvantage(s) of using trade credit include ___________.

  1. Loss of goodwill

  2. Higher prices of raw materials

  3. The opportunity cost of discount

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Trade credit is issued when goods and services are traded on credit. It is offered by one seller to the other.Disadvantage(s) of using trade credit include:a) loss of goodwill
b) higher prices of raw materials
c) the opportunity cost of discount.
Multiple choice organisation of commerce and management sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Trade credit is a convenient and continuous source of funds, which is one of the __________ of trade credit.

  1. Limitations

  2. Merits

  3. Functions

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

Trade credit is a short term source of finances where a trader credits finances to another trader for the smooth flow of business. Trade credit is a convenient and continuous source of funds as it is a short term credit and has a low amount value hence can be taken without long term financial plannings. This is one of the merits of trade credit.

Multiple choice organisation of commerce and management multinational corporations global enterprises meaning and features of mncs public sector undertakings & global enterprises

Promotion of Global co-operation through an MNC is an advantage gained by _________.

  1. home country

  2. host country

  3. both country

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

Home Country in international compensation, this is the country upon which an expatriate's compensation is based. It is usually the expatriate's home country or the country in which the employee's headquarters is located.

Multiple choice organisation of commerce and management multinational corporations global enterprises meaning and features of mncs public sector undertakings & global enterprises

Aim for MNCs drive is to ___________.

  1. avoid trade barriers

  2. meet different rules and regulations (avoid non-tariff barriers)

  3. secure supplies of raw materials or markets

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

Business enterprises wants to be international because it has many advantages. It avoids trade barriers which are the rules and regulations that regulates foreign trade and investment. Tarrif is the tax imposed by the government on the import and export of goods. MNC get some relaxation in these tarrifs. Secure, timely and cost effective supply of raw materials is the backbone of any enterprise. MNC can get easy access to the raw materials as it can set up operations where the raw materials are easily found which in turn reduces the production cost.

Multiple choice organisation of commerce and management multinational corporations global enterprises meaning and features of mncs public sector undertakings & global enterprises

Which of the following is/are advantage of MNC's?

  1. The activities of MNC's in the host countries may be harmful to the national interests as MNC's are solely guided by the profit maximization.

  2. MNC's restrict competition and acquire monopoly power in certain areas in the host countries.

  3. The activities of MNC's in the host countries not harmful to the national interests as MNC's are solely guided by the profit maximization.

  4. MNC's help the host countries to reduce the imports and promote the exports by raising domestic production.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Advantages of multinational companies. Multinationals create jobs which boosts the local economy and more workers to tax. They bring expertise in that skills of workforce are improved, some may use IT that would never have before or other skills now deemed basic by the western or developing world.

Multiple choice elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

What is the reason for MNC's Growth?
A. Reduce transport and distribution costs
B. Meet different rules and regulations.
C. Avoid trade barriers
Select the correct answer from the options given.

  1. A and B

  2. B and C

  3. C and B

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
  • Location – MNCs have their headquarters in home countries and have their operational division spread across foreign countries to minimize the cost.
  • Capital Assets – Major portion of the capital assets of the parent company is owned by the citizens of the company’s home country.
  • Board of Directors – Majority of the members of the Board of Directors are citizens of the home country.
  • MNCs are large-sized corporation and exercise a great degree of economic dominance.
Multiple choice elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

Multinational corporation's trade analysis differs from our conventional trade analysis because multinational corporation analyses ________.

  1. purely competitive markets rather than regular markets.

  2. the international movement of inputs as well the movement of finished goods.

  3. absolute cost differentials rather than comparative cost differentials.

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

MULTINATIONAL COMPANIES IN INDIA -AN ANALYSIS. In the present day world of Globalisation, Multinational Companies have played an important role in the development of home countries where the MNCs are operating. ... Inviting and making ways for MNCs to operate in India will enhance the economic development of the country.

Multiple choice elements of business multi national corporations advantages and disadvantages of mncs meaning and definition multinational companies - meaning and features

Which of the following is/are advantage of MNC's?

  1. The activities of MNC's in the guest countries may be harmful to the national interests as MNC's are solely guided by the profit maximisation.

  2. MNC's restrict competition and acquire monopoly power in certain areas in the host countries.

  3. The activities of MNC's in the host countries may be harmful to the national interests as MNC's are solely guided by the profit maximization.

  4. MNC's help the most countries to reduce the imports and promote the exports by raising domestic production.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Advantages of Multinational Corporations in developing countries.

  • Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory is counted as a capital flow on the financial account of the balance of payments. This capital investment helps the economy develop and increase its productive capacity.
  • The model of growth suggests that this level of investment is important for determining the level of economic growth. 
  • The inflows of capital help to finance a current account deficit. (Basically, this means that foreign investment enables developing countries to buy imports)
  • Multinational corporations provide employment. Although wages seem very low by Western standards, people in developing countries often see these new jobs as preferable to working as a subsistence farmer with even lower income..
  • Multinational firms may help improve infrastructure in the economy. They may improve the skills of their workforce. Foreign investment may stimulate spending in infrastructure such as roads and transport.
  • Multinational firms help to diversify the economy away from relying on primary products and agriculture – which are often subject to volatile prices and supply.

Multiple choice geography manufacturing industries in india - ii : mineral-based information technology industry automobile and electronic industries electronic, heavy and petrochemical industries in india

Which one of the following is contributing to the large amount of foreign exchange?

  1. Export of gold jewellery

  2. Export of petroleum products

  3. Export of engineering goods

  4. Export of hardwares and softwares
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

D. Exports of Hardware and software.

Indian software exports are huge – roughly US$75bn in 2014/15 (and c.US$100bn if BPO services are included) – and continuously registering double-digit annual growth. The location of production has changed.  In the early 1990s, 75% of work took place on-site, 25% in India.  By 2013/14, it was said that 20% of work took place on-site, 80% in India.  This means that net foreign exchange earnings will have risen as a proportion of gross since offshore work requires much less foreign exchange outflow than on-site working.

Middle East countries remain the top destination of export for Computer Hardware during the year 2011-12. Personal Computer has emerged to be the top item of export during the year 2011-12.

Multiple choice history the making of a global world causes of nazism feudalism in europe british exploitation of the indian economy

What was 'Corn Laws'?

  1. Restriction on import of corn

  2. Permission on import of corn

  3. Restriction on export of corn

  4. Permission on export of corn.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Population growth from the late eighteenth century had increased the demand for food grains in Britain. As urban centers expanded and industry grew, the demand for agricultural products went up, pushing up food grains prices. Under pressure from landed groups, the government also restricted the import of corn. The laws allowing the government to do this were commonly known as the 'Corn Laws'.

Multiple choice political science facilitators of international business introduction, status, objectives, features, scope and functions of the wto world trade organisation (wto) world trade organisation

Which of the following body is not related to the WTO?

  1. Dispute Settlement Body

  2. Trade Policy Review Body

  3. Council of trade in goods

  4. Exchange Rate Management Body
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The World Trade Organization (WTO) deals with trade rules and disputes; it does not manage exchange rates, which is typically the domain of the International Monetary Fund (IMF).

Multiple choice political science facilitators of international business introduction, status, objectives, features, scope and functions of the wto world trade organisation (wto) world trade organisation

One of the major objectives of the WTO is _________.

  1. Holding consultations with IMF and IBRD and its affiliated agencies.

  2. To promote an integrated, more viable and durable trading system.

  3. Ensuring that all the rules regulations prescribed in the Act are duly followed by the member countries for the settlement of their disputes.

  4. The system encourages good government.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A primary objective of the WTO is to facilitate the flow of trade by promoting an integrated, viable, and durable multilateral trading system.