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 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.

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 in services is the sum of service exports and imports divided by the value of GDP, all in current U.S. dollars'. State whether this statement is correct.

  1. True

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

That amount gets added to the country's GDP. If a nation exports \$80 billion of goods and imports \$100 billion, it has net exports of minus $20 billion, and that amount is subtracted from the nation's GDP.That means that no nation wants a negative trade balance.

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

Terms of trade between two countries refer to a ratio of ______.

  1. export prices to import prices

  2. currency values

  3. import to export

  4. balance of trade to Balance of payments
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Terms of trade. The terms of trade (TOT) is the relative price of imports in terms of exports and is defined as the ratio of export prices to import prices. It can be interpreted as the number of import goods an economy can purchase per unit of export goods

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

 If tariff is higher, then the imports will _______.

  1. increase

  2. decrease

  3. same as before

  4. either decrease or increase depends on the country's policies
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Those exports bring money into the country, which increases the exporting nation's GDP. When a country imports goods, it buys them from foreign producers. The money spent on imports leaves the economy, and that decreases the importing nation's GDP

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 is/are the disadvantage(s) of free trade?

  1. Unrealistic policy

  2. Increased economic dependence

  3. Unbalanced development

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Disadvantages of Free Trade
  1. Massive Job Losses. As trade barriers are eliminated, certain goods may be cheaper to obtain overseas than to make domestically.
  2. Predatory Pricing.
  3. Increased Vulnerability.
  4. New Industries Can't Develop.
  5. Tax Troubles.
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

Indian imports can be classified into _____________.

  1. 2 categories

  2. 3 categories

  3. 4 categories

  4. 5 categories
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Indian imports are traditionally classified into three main categories: capital goods, intermediate goods, and consumer goods.

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 one of the following  has the least trade relations with India?

  1. USA

  2. Singapore

  3. Malaysia

  4. Egypt
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Many countries have good relationship with India like japan,Russian Federation,Israel, Afghanistan, France, Bhutan Bangladesh, and the united states. Intact russia is the largest supplier of military equipment to India, followed by Israel and France.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Net exports will be positive if ______.

  1. import > export

  2. export > import

  3. export = import

  4. export = zero
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Exports refer to the goods and services sold by domestic traders to foreign traders; the revenue thus generated is foreign trade revenue. Imports, on the other hand, refers to the purchases made by the domestic traders from foreign traders; which requires foreign trade payments.
Net exports will be positive when revenue from foreign trade is higher than payments, i.e., exports greater than imports.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

By EXIM policy we mean _____________________.

  1. external and internal policy

  2. export-import policy

  3. extra import policy

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

EXIM policy stands for Export-Import policy, which governs the rules and regulations related to the trade of goods and services between a country and the rest of the world.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

__________ has been founded to act as permanent watchdog on the International Trade.

  1. IBRD

  2. ADB

  3. WTO

  4. IMF
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

WTO or World Trade Organization has been founded to act as permanent watchdog on the International Trade. Its main function is to ensure global trade flows. The World Trade Organization is an intergovernmental organization. It is concerned with the regulation of international trade between nations.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Depreciation of domestic currency leads to rise in _____________.

  1. Exports

  2. Imports

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Currency depreciation makes domestic goods relatively cheaper for foreign buyers, which increases the demand for domestic products abroad, leading to a rise in exports.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

An increase in demand for imported goods raises the demand for foreign exchange. 

  1. True

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

Importing goods requires paying in foreign currency. Therefore, an increase in demand for imports directly increases the demand for foreign exchange to settle those payments.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Foreign exchange transactions dependent on other foreign exchange transactions are called ________________.

  1. Current Account Transactions

  2. Capital Account Transactions

  3. Autonomous Transactions

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

Accommodating transactions are those undertaken to cover the deficit or surplus in the balance of payments, making them dependent on the autonomous transactions that created the imbalance.

Multiple choice business economics and quantitative methods balance of payments exchange rate balance of payments and exchange rate balance of trade and balance of payments

Supply curve of foreign exchange ____________________.

  1. Horizontal straight line parallel to X-axis

  2. Vertical straight line parallel to Y-axis

  3. Slope downwards

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

The foreign exchange rate and supply of foreign exchange is positively related and it is upward sloping curve as because the components of supply of foreign exchange rise as foreign exchange rate rises. For example exports rise as the foreign exchange rate rises.