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 history the rise of nationalism in europe reformation and enlightenment in europe reformation in europe national movements in europe historiography

The union abolished trade barriers and reduced the number of currencies from over _______ to two.

  1. Thirty

  2. Thirteen

  3. Twenty

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

The Zollverein, a customs union formed in 1834, abolished internal trade barriers and reduced the number of currencies in the German states from over thirty to just two, facilitating economic integration.

Multiple choice geography state of industries in india meaning and classification of industries industrialisation and urbanisation urbanisation

What is trade?

  1. The action of buying and selling goods and services.

  2. The development of industries

  3. Moving from one place to another

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

Trade is buying and selling of goods and services between two individual or more than that. It is basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.

Multiple choice geography state of industries in india meaning and classification of industries industrialisation and urbanisation urbanisation

Multilateral Trade Agreements are trade agreements between _______.

  1. more than one country

  2. multinational companies

  3. micro and small scale units

  4. most preferred nations
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Multilateral trade agreements are treaties between three or more countries to reduce trade barriers and facilitate commerce between the participating nations.

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

Import and export are the two sides of ____________.

  1. market equilibrium

  2. international trade

  3. global currency valuations

  4. balance of payments
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Import and export are the two sides of international trade where 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. 

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

When a country's export is higher than the imports, the net earning from trade is ___________.

  1. negative

  2. constant

  3. positive

  4. none of the above
Reveal answer Fill a bubble to check yourself
C 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 export is an income for the country whereas import is an expense for the country. Therefore, when export is higher than imports then the net earnings from the trade of a country is positive. 

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

If net income from abroad is negative it means value of exports is less than value of imports.

  1. True

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

Net income from abroad refers to net factor income from abroad, which is the difference between income received from abroad and income paid abroad. This is distinct from net exports, which is the difference between exports and imports of goods and services.

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 civics agriculture sector rural credit role of agriculture sector green revolution animal husbandry and fishery cattle farming

Which type of subsidies are provided to industrial research and pro competitive development activity in disadvantaged regions?

  1. Prohibited subsidies

  2. Actionable subsidies

  3. Non-actionable subsidies

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

The subsidy contains three basic elements are a financial contribution, by a government or any public body within the region of an element, which confers an advantage. All three of these elements must be satisfied in order for a subsidy to exist. Non-actionable subsidies, however, are not subject to these tariffs. 

For example, environmental and scientific subsidies are non-actionable. non-actionable subsidies are those which are functional to explore and pre-competitive development performance, and others which help the disadvantaged region.

The correct answer is C.

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.