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 britain and the world the beginnings of empire history

What was Adam Smith's attitude towards protectionism?

  1. He was in favor of protectionism, but should be practiced in a controlled manner

  2. He was neutral towards protectionism

  3. He was against protectionism as it reduced trade

  4. He thought protectionism is essential for the development of the British domestic industry
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Adam Smith argued that protectionism and trade restrictions distorted markets and reduced overall national wealth, advocating instead for the efficiency of open markets.

Multiple choice britain and the world the beginnings of empire history

Consider the following statements about the 'Trade Triangle':
(i) It was supported by Britain.
(ii) Britain sent to goods to Africa in exchange for slaves.
(iii) The slaves were then transported to the Americas and sold to plantation owners.
(iv) The raw materials were then sent back to Britain. 
Which of the above statement/s is/are correct?

  1. Only (i) and (ii)

  2. Only (ii) and (iii)

  3. Only (i), (iii) and (iv)

  4. Only (ii) and (iv)

  5. All statements are correct
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The 'Trade Triangle' involved Britain sending manufactured goods to Africa, exchanging them for slaves, transporting slaves to the Americas, and returning with raw materials like sugar and cotton.

Multiple choice

How did the United States' Open Door Policy shape the economic future of China?

  1. It prevented European nations from opening trade is Japan and China

  2. it created competition with American markets in Japan

  3. It allowed all nations to trade with China

  4. it allowed the Chinese to immigrate to the U.S
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Open Door Policy, proposed by the United States in 1899, was designed to ensure that all nations had equal access to trade with China, preventing any single power from monopolizing Chinese markets.

Multiple choice

What is the Open Door Policy?

  1. keep travel open in the Suez Canal

  2. Freedom of the Seas for all nations

  3. Keeping trade of Japan open for all nations

  4. Keeping China trade open for all nations?
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Open Door Policy was a diplomatic proposal by the U.S. in 1899 to ensure that all nations had equal rights to trade with China, preventing the country from being carved into exclusive spheres of influence.

Multiple choice

Which of the following is one requirement for an acceptable median of trade?

  1. Accepted by everyone

  2. Backed by a reserve of gold or silver

  3. Not easily destroyed

  4. Made of gold or silver
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For any item to serve effectively as a medium of exchange (misspelled as 'median of trade' in the question), it must be widely accepted by everyone in the society as payment for goods and services.

Multiple choice

Import

  1. Send goods out of a country

  2. Bring goods into a country

  3. Drive into a port

  4. Drive into another country
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Importing refers to the process of bringing goods or services into a country from abroad for sale. Exporting, on the other hand, is sending goods out of the country.

Multiple choice

Export

  1. Send goods out of a country

  2. Bring goods into a country

  3. Drive into a port

  4. Drive into another country
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Exporting is the act of sending goods or services to another country for sale. This is the opposite of importing, which brings goods in.

Multiple choice

Did he accept trading with other countries?

  1. True

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

Emperor Akbar actively encouraged international trade, establishing commercial relations with European powers like the Portuguese and various Asian nations. This trade boosted the Mughal economy and brought new goods and wealth into the empire.

Multiple choice

the system in which people make and exchange goods and services

  1. exports

  2. economy

  3. imports
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An economy is the system of trade, production, and consumption of goods and services within a region or country. Imports and exports are specific components of trade within that economic system, referring to goods brought in or sent out of a country.

Multiple choice

 buying or selling of goods especially in large amounts

  1. commerce

  2. exports

  3. imports
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Commerce is the activity of buying and selling, especially on a large scale, between different countries or regions. Exports and imports are specific directions of trade (sending goods out or bringing them in), whereas commerce is the overarching term for the trade activity itself.

Multiple choice

exchange of goods or services

  1. trade

  2. resources

  3. alliance
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Trade is the action of buying, selling, or exchanging goods and services between people, companies, or countries. Resources are the raw materials used, and alliances are formal agreements between nations.

Multiple choice

The total value of goods and services which are produced whitin a country

  1. Alternating Current/Direct Current (AC/DC)

  2. Rapid Eye Movement (REM)

  3. Free Trade Agreement (FTA)

  4. Gross Domestic Product (GDP)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Gross Domestic Product (GDP) is the standard monetary measure of the market value of all final goods and services produced within a country's borders in a specific time period. The other choices represent electrical currents, sleep phases, and trade policies, which are unrelated to this economic metric.

Multiple choice

What each party exchanges must have ______________ value.

  1. Economic

  2. Legal

  3. Measurable

  4. No value is required
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For a contract to be enforceable, the consideration exchanged by each party must have legal value, meaning it must represent a legal benefit to the promisor or a legal detriment to the promisee. It does not need to have economic or measurable market value, as parties are free to contract for things of purely personal or subjective worth.