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 trade trade and factors affecting trade trading and economic organisations trade and trade organisations

Give an example of a trading bloc.

  1. UNO

  2. ASEAN

  3. IMF

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

  • ASEAN is a geo-political and economic organization of 10 countries located in Southeast Asia. 
  • The main aims and purposes of ASEAN are to accelerate the economic growth, social progress and cultural development in the region.

Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

International trade is influenced by ______ relationship among the countries.

  1. Social

  2. Political

  3. Economic

  4. Cultural
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
  • The world's political relations has a big impact on international trade. 
  • International trade can be one of the most contentious of political issues, both domestically and between governments.
Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

______ has primarily played an important role in developing trade.

  1. Communication

  2. Technology

  3. Transportation

  4. Media
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • Transportation plays a major role in the economic uplift of a country as it promotes internal and external trade, economic use of natural resources, mobility of skilled labour-force, diversification of markets, provision of fuel, reduction in employment, increase in agricultural and industrial production etc. 
Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

Which two countries export machinery, automobiles, chemicals?
This question has multiple answers.

  1. USA

  2. Canada

  3. Latin America

  4. Europe
Reveal answer Fill a bubble to check yourself
A,B Correct answer
Explanation

The United States is the most important economic markets in the world. The largest exports of the United States are cars, refined petroleum, planes, helicopters, and spacecraft, and pharmaceuticals. The success of the United States economy can be attributed to factors such as a wealth of natural resources, excellent infrastructure, and a productive workforce. The country also has the designation of being the world's largest industrial sector. 


Second, comes Canada. It is one of the world's wealthiest nations. Motor Vehicles, aircraft, coal, and fertilizers are some of the top exports of Canada. After WWII, Canada’s economy developed rapidly fueled by growing service, manufacturing, and mining sectors. The discovery of oil reserves has propelled Canada to the fifth largest producer of oil in the world. The country produces high-quality products since it is a high-tech industrial society, which competes favorably in the international market.

Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

Latin America exports ______.

  1. Foodstuff

  2. Machinery

  3. Automobiles

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

The main exports from Latin America are agricultural products .

It has long been associated with the production and export of a diverse range of agricultural commodities, whether it is coffee from Brazil and Colombia, beef from Argentina, or bananas from Ecuador

Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

Which region mainly imports industrial raw materials?

  1. North America

  2. Africa

  3. Europe

  4. Australia
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • Trade in raw materials is extremely important for the sustainability of European countries and their economies.
  •  Construction, chemicals, the automotive and aerospace industries, machinery and equipment are some of the sectors that are most dependent on access to raw materials.
  • The EU has an ongoing trade deficit in raw materials  (SITC sections 2 and 4, including non-manufactured goods such as oilseeds, cork, wood, pulp, textile fibres, ores and other minerals as well as animal and vegetable oils) since 2005.
Multiple choice business organisation import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

Forwarding agents acting on behalf of exporters and Clearing agents act on behalf of the importer in completing the formalities of international trade.

  1. True

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

Forwarding agents (freight forwarders) typically assist exporters by managing logistics, while clearing agents (customs brokers) specialize in the documentation and clearance processes required by importers.

Multiple choice business organisation import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

Middlemen assisting in international trade include(s) which of the following?

  1. Export agents

  2. Forwarding agent

  3. Import agent

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

Middlemen in international trade include various entities that facilitate the movement and sale of goods, such as export agents, import agents, and forwarding agents.

Multiple choice business organisation import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

In ________, a firm itself approaches the overseas buyers/ suppliers and looks after all the formalities related to exporting/importing activities.

  1. direct exporting/importing

  2. indirect exporting/importing

  3. contract manufacturing

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

A situation in which a company sells its products directly to customers in another country without using another person or organisation to make arrangements for them, or a product that is sold in this way: The direct export of goods involves certain procedures.

Multiple choice business organisation import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

Identify the limitation(s) of importing/ exporting form of international business.

  1. Exporting/importing involves additional packaging, transportation and insurance costs.

  2. Exporting is not a feasible option when import restrictions exist in a foreign country.

  3. Export firms basically operate from their home country.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
 Disadvantages 
  • 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 business organisation import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

Exposure to foreign investment risks is nil or much lower in foreign trade. This is because of which of the following advantages of exporting/importing?

  1. It is less complex an activity.

  2. Exporting/importing does not require much of investment in foreign countries.

  3. Firms do not directly deal with overseas customers.

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

Foreign investments add diversity but there are risks. Investing in foreign countries is a relatively new option for individual investors. Luckily, the advent of internationally focused mutual funds and exchange-traded funds (ETFs) has made it easier.