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

Measures introduced to correct BOP position in 1992-93 were ______.

  1. exchange rate management

  2. liberalization of import licensing

  3. tariff reductions

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

The 1991 economic reforms included comprehensive measures to stabilize the BOP, including currency devaluation (exchange rate management), the removal of restrictive import licensing, and the lowering of customs tariffs.

Multiple choice civics introduction to gst fundamentals of gst tax journal

Import of goods and services are covered under _____________.

  1. CGST

  2. SGST

  3. IGST

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

Import of goods and services into the country are covered under IGST. Other duties are also levied in addition to IGST.

CGST is for Intra state levied by Central Government and SGST is levied by State Government.
Hence, C is the correct option.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

In the pre-reforms period (i.e. before 1991), restrictions on import consisted of:

  1. Import Licenses

  2. Quantitative Restrictions

  3. Quota System

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

India had  adopted socialist form of economy before 1991 which involved a lot of government intervention into International trade where import was banned on most of the goods through quota and licenses so that the foreign goods does not dominate domestic market. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following does not relate to the External Sector Reforms in 1991?

  1. Reduction in the number of items covered by import licenses

  2. Permission for free trade of all items except a negative list of imports and exports

  3. Increasing of import/ export duty rates

  4. Permission for foreign direct investment
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Increasing of import/ export duty rates does not relate to the External Sector Reforms in 1991. As per New economic policy which was adopted in 1991, the import rates and export duty rates were to be decreased so that there would be fair flow of goods between the domestic country and other countries as a result of which there will be rationalization in the tariff structure,

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Lowering of Import / Export Duty Rates, as part of the External Sector Reforms in 1991, relates to -

  1. Exchange Rate Stabilisation

  2. Rationalisation of Tariff Structure

  3. Quantitative Restrictions

  4. Foreign Direct Investment
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As a part of globalization, the import rates and export duty rates were to be decreased so that there would be fair flow of goods between the domestic country and other countries as a result of which there will be rationalization of tariff structure. 

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

100% FDI allowed in _______________.

  1. Drugs & Pharmaceuticals

  2. Courier service

  3. Hotels and Tourism

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
100% foreign direct investment is allowed in:
a) Drugs and Pharmaceuticals
b) Courier service
c) Hotels and Tourism
FDI stands for Foreign Direct Investment. FDI can be defined as a form of investment which controls the ownership of a business in one country by an entity based in another foreign country.
Multiple choice book keeping and accountancy accounting equation meaning, objectives and need of adjustments need for adjustments accounting equations and transactions

More MCQs on Foreign Exchange Management 1. Which of the following is not an example of an international trade draft?

  1. Time draft.

  2. Sight draft.

  3. Both the first and second answers are correct

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

Time draft and Sight draft are both types of international trade drafts, as is Usance draft (which is essentially another term for time draft). The question asks what is NOT an example of a single draft type - option C says 'Both the first and second' which is not itself a draft type but a category combining multiple types.

Multiple choice business economics and quantitative methods nature and scope of economics definition, scope, importance and limitation of statistics introduction - statistics for economics meaning and definition of statistics

Which of the following pairs is not correctly matched?

  1. WTO - Generally forbids the use of quantitative restrictions on trade

  2. IMF - Provides finance to correct disequilibrium in balance of payments

  3. RBI - Promotes trade among countries

  4. IBRD - Gives long term loans for development
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Option C incorrectly matched as RBI promotes monetary policy in India and the WTO promotes trade among countries.

Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

Goods that a country gets from other countries are called______.

  1. Exports

  2. Imports

  3. Foreign Trade

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

Exports and imports are the main elements of foreign trade. 

Export - When goods are sent from one country to another then it is called export.
Import - When goods are purchased from other countries then it is called import.
When the Export value is more than import value then foreign trade will be favourable to a country.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

State a protectionism technique used by the government to promote small scale industries. 

  1. Quotas

  2. Tariffs

  3. Reserving production of few products to small scale industries only

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

Protectionist techniques included quotas, tariffs, and the reservation of specific products for small-scale production to shield them from large-scale competition.

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

Which of the following is not a non-tariff barrier?

  1. Voluntary export restraint

  2. Health and product standards

  3. Environmental protection laws

  4. Ad-valorem duties
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Tariff barriers refers to various tariffs or duties imposed on foreign trade transactions to impose trade restrictions. Among the given options ad-valorem duty is tariff barrier, while the others are non-tariff barriers to trade.
Ad-valorem duty is imposed on import goods as percentage of the total value of goods imported.

Multiple choice history economic system and economic policies american dominance, neo-imperialism and new economic policy insights on lpg changing economic policies

Liberalization means ______.

  1. removal of trade barriers

  2. opening border with neighbouring countries

  3. relaxation of Government policies and regulations in order to encourage free and fair growth of trade and industry.

  4. abolition of various business laws and acts
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Liberalization refers to the relaxation of Government policies and regulations in order to encourage free and fair growth of trade and industry. It is one of the policies under new economic policy which was adopted by Indian economy in 1991. It promoted free and fair trade.

Multiple choice civics consumers' awareness consumer protection act of 1986 need for consumer awareness consumer : satisfaction and protection

In the pre-reforms period (i.e. before 1991), control was exercised over import of _______________.

  1. Consumer Goods

  2. Capital Goods

  3. Both (a) and (b)

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

Before the 1991 economic reforms, India followed a protectionist policy that strictly controlled the import of consumer goods to encourage domestic production.

Multiple choice civics foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

As a result of the foreign trade reforms ________.

  1. the number of import licenses has increased.

  2. only a few types of goods and services can now be exchanged freely.

  3. EPCG scheme has been abolished.

  4. the average tariff rates have been reduced.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Prior to the 1991 economic liberalisation,India was a closed economy due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports. Foreign investment was strictly restricted to only allow Indian ownership of businesses. Since the liberalisation, India's economy has improved mainly due to increased foreign trade.