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 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.

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

In which meeting was the idea of the WTO first coined?

  1. Development of poor nations conference

  2. Bretton woods conference

  3. Distribution of wealth meet

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

The Bretton Woods conference was the meeting which coined the idea of World Trade Organization (WTO) and International Monetary Funds (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

Though the WTO has various benefits to its member countries, it has often been criticised for trade rules which are still unfavourable towards developing countries.

  1. True

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

The WTO is frequently criticized by developing nations for trade rules that may favor developed economies, such as agricultural subsidies or intellectual property rights.

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

Bretton Woods conference agreed upon having some arrangement among themselves so as to liberalise the world. The arrangement is known as __________.

  1. Tariff

  2. Customs

  3. International Trade Organization

  4. General Agreement for Tariffs and Trade
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The General Agreement on Tariffs and Trade (GATT) was the precursor to the WTO, established after the Bretton Woods conference to reduce trade barriers.

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

______ helps fostering growth of developing countries by providing them with special and preferential treatment in trade related matters.

  1. World Bank

  2. WTO

  3. IMF

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

The WTO provides special and differential treatment provisions to developing countries, allowing them more flexibility and longer timeframes to implement trade agreements.

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

Any state or customs territory having full autonomy in the conduct of its trade policies may join the WTO.

  1. True

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

The WTO membership is open to any state or customs territory that possesses full autonomy in the conduct of its external trade policies. This ensures that only entities capable of fulfilling WTO obligations can join.

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

The World Trade Organisation is the successor to the ____________.

  1. UNCTAD

  2. ADB

  3. IMF

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

The World Trade Organization was established on January 1, 1995, replacing the General Agreement on Tariffs and Trade (GATT), which had been in place since 1948.