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 import and export procedure types of foreign trade exports and imports nature and scope of foreign trade

The composition of trade denotes ___________________.

  1. the relationship between value of exports and

    value of imports

  2. the countries to which commodities are exported and the countries from which commodities are imported

  3. the nature of goods that are exported and imported

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

The composition of trade refers to the specific types of commodities or goods that a country exports and imports, rather than the total value or the trading partners.

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

For promoting the export, the government has set up
1. The Central Advisory Board on Trade
2. The Trade Development Authority
3. The Federation of Indian Export Organisation
4. Commodity Boards
Which is correct?

  1. 1 and 3

  2. 2 and 4

  3. 1, 3 and 4

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

The government of India has established various bodies to promote exports, including the Central Advisory Board on Trade, Trade Development Authority, FIEO, and Commodity Boards.

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

Import & Export require huge amounts of foreign investments.

  1. True

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

Import and export do not require huge amount of foreign investment as the importer needs an exporter in foreign country. similarly, an exporter will need to follow export laws and need an importer in the foreign country. 

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

Under the ___________ scheme, an exporter is allowed duty free supply of inputs required to manufacture export goods.

  1. export manufacturing under bod scheme

  2. advanced license scheme

  3. exemption of payment of sales tax

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

Under the advanced license scheme, an exporter is allowed duty free supply of inputs required to manufacture export goods.

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

Various trade promotion measures and schemes available to business firms are mentioned in the ___________ policy.

  1. organisational

  2. export-import

  3. government

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

Various trade promotion measures and schemes available to business firms are mentioned in the export-import policy. this export-import policy is also known as the EXIM policy.

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

______________ is to encourage the import of capital goods for export production.

  1. EPCG

  2. Exemption of payment of sales tax

  3. Advance licence scheme

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

Export Promotion Capital Goods (EPCG) scheme is to encourage the import of capital goods for export production, it allows import of capital goods including spares for pre production, production, post production of export goods at zero duty.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

What do you mean by Trade in Services?

  1. Exchange of services between residents and non-residents of an economy.

  2. Exchange of products between residents and non-residents of an economy.

  3. Exchange of products and services between residents and non-residents of an economy.

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

Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services that takes place between a producer and consumer that are, in legal terms, based in different countries is called International Trade in Services.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

 Net export equals _______.

  1. Export * Import

  2. Export + Import

  3. Export - Import

  4. Exports of service only
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Net exports are the value of a country's total exports minus the value of its total imports. It is a measure used to calculate aggregate a country's expenditures or gross domestic product in an open economy.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

Services traded between economies could include transport, construction services, insurance and financial services etc.

  1. True

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

Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services that takes place between a producer and consumer that are, in legal terms, based in different countries is called International Trade in Services.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

International trade takes place when buyers find foreign markets cheaper to buy in and sellers find them more profitable to dispose of their products than the domestic market.

  1. True

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

International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

Trade services can be restricted by the barriers of _____.

  1. no such restriction

  2. domestic regulations

  3. RBI

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

Article VI.4 of the General Agreement on Trade in Services (GATS) and the Decision on Domestic Regulation (S/L/70) call upon WTO members to develop any necessary disciplines to ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures.

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

Which of the following gauges the significance of trade in services?

  1. Formulation of General Agreement on Trade in Services (GATS)

  2. EXIM Policy

  3. Tarrifs

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

The General Agreement on Trade in Services (GATS) is among the World Trade Organization's most important agreements. The accord, which came into force in January 1995, is the first and only set of multilateral rules covering international trade in services

Multiple choice business organisation conditions of purchase and sale and documents used in foreign trade foreign invoice procedure and documents used in foreign trade export and import procedures

The Trade Agreement has boosted the total trade between India and ASEAN substantially.

  1. True

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

ASEAN increases competition and lowers world prices, which provides benefits to consumers by raising the purchasing power of their own income, and leads a rise in consumer surplus.It also breaks down domestic monopolies, which face competition from more efficient foreign firms.