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 economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

The income received by a country through exports, in the form of _____________, can be utilized by the country to import required goods and services.

  1. domestic currency

  2. foreign currency

  3. SDRs

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

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So when foreign currency is received through exports from a certain country it can be utilized in importing the required goods and services from that country. 

Multiple choice history india's relations with the other asian countries rise and expansion of islamic world rise and spread of islam the rise and expansion of islam

Foreign trade took hold primarily in ________________.

  1. The Ottoman and the Mughal empires.

  2. The Safavid and the Ottoman empires.

  3. The Mughal and the Safavid empires.

  4. All three empires.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Ottoman and Safavid empires were strategically located along major trade routes, such as the Silk Road, which allowed foreign trade to flourish significantly.

Multiple choice economics sustainable development with equity liberalisation objectives of economic planning in india need for sustainable development introduction to social movements and its types social movements

The basis of international trade is _________.

  1. Only absolute advantage

  2. Only comparative advantage

  3. Both A and B

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

 International Trade refers to the exchange of products and services from one country to another. Differences in cost form the basis of trade. Differences in cost may be two types: (i) absolute cost difference, and (ii) comparative cost difference. In 1776, Adam Smith argued that absolute cost difference or absolute advantage is the basis of trade.

Multiple choice geography introduction to the continents: antarctica to australia australia australia australia - geographical features

The chief imports of Australia is _________.

  1. Gold, cotton, iron and rice

  2. Cigarettes, motorcars, cotton clothes, machines and Petroleum

  3. Coal, iron and wool

  4. Meat, wheat, silver and woolen clothes
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Australia's economy historically relied on importing manufactured goods, machinery, and petroleum products while exporting raw materials like minerals and agricultural products.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

The integration of the country with the world economy is called ______.

  1. International trade

  2. European Community Market

  3. Free trade zones

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

The integration of the country with the world economy is called globalization. Globalization can be defined as the growing interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and also through rapid diffusion of technology.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Which of the following restrictions were removed by the liberalization policy?

  1. Industrial licensing

  2. Clearance from the MRTP act

  3. Foreign Exchange restrictions

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Liberalization policy helped to end of license, quota and many more restrictions and controls which were put on industries before 1991. Following restrictions were removed by the liberalization policy:
a) Industrial licensing
b) Clearance from the MRTP act
c) Foreign Exchange restrictions.
Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

External sector liberalisation means _______.

  1. relaxing restrictions on international flow of goods, services, technology and capital

  2. relaxing restrictions on internal flow of capital

  3. relaxing the role of market

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

External sector liberalization means relaxing restrictions on international flow of goods, services, technology and capital.  External sector liberalization has helped bringing down the volatility as well as the instability of our economy. It helps to create a more free and competitive economy.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization does NOT include__________________.

  1. reduction in taxes

  2. simplifying exports

  3. reducing administrative burden on state.

  4. abolishing industrial licensing requirement for most of the industries.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liberalization does NOT include reducing administrative burden on state. It is a process by which free and fair trade is promoted. It includes reduction in taxes, simplification of exports and abolishing industrial licensing requirement for most of the  industries.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Integration of national economies into world economy is called _______________.

  1. Globalisation

  2. Privatization

  3. Liberalization

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

Integration of national economies into world economy is called globalization.Globalization may be defined as "the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and the international capital flows and also through the more rapid and widespread diffusion of technology.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Integration of national economies into a world economy is known as _______.

  1. privatization

  2. globalization

  3. liberalization

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

Integration of national economies into a world economy is known as globalization.Globalization may be defined as "the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and the international capital flows and also through the more rapid and widespread diffusion of technology.

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Which of the following is NOT included in liberalization?

  1. Reducing in tax matters

  2. Abolition of licensing

  3. Simplification of policies

  4. Imposition of tariff barriers
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Liberalization refers to end of licence, quota and many more restrictions and control that were put on many industries. The term basically refers to opening of the economy to the world and providing freedom to the departmental and public sector undertakings to access capital market in order to achieve international competitiveness. It includes removal of tariff barriers for better flow of goods and services between the countries. 

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

Liberalization does not includes_______________.

  1. Abolishing industrial licensing requirement in most of the industries

  2. Freedom in deciding the scale of business activities

  3. Restriction in fixing prices of goods and services

  4. Simplifying the procedure for imports and exports.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liberalization refers to end of licence, quota and many more restrictions and control that were put on many industries. The term basically refers to opening of the economy to the world and providing freedom to the departmental and public sector undertakings to access capital market in order to achieve international competitiveness. It does not provide restrictions in fixing prices of goods and services in the economy. 

Multiple choice organisation of commerce and management liberalization, privatization and globalization concept and necessity of globalization highlights of lpg policy multinational corporations

______ aims at integrating our national economy with that of the world.

  1. Globalization

  2. Liberalization

  3. Privatization

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

Globalization refers to the integration of various economies of the world by removing of strict policies in regard to the import and export of goods and services and foreign direct investments. Globalization involves greater interaction and interdependence among the various nations of the global economy which makes the market very vast. 

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

Deficit Balance of trade suggests that __________.

  1. value of exports of goods > value of imports of goods

  2. value of imports of goods > value of exports on goods

  3. value of exports of goods = value of imports of goods

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

A deficit in the balance of trade occurs when the value of imports of goods exceeds the value of exports of goods.