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 economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

In the pre-reforms period (i.e. before 1991), import permission was available primarily for _______________.

  1. Consumer Goods

  2. Capital Goods

  3. Both (a) and (b)

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

In the pre-1991 era, India followed a policy of import substitution. Import permissions were strictly regulated and prioritized for essential capital goods and machinery needed for industrialization, rather than consumer goods.

Multiple choice

goods coming from a country

  1. import

  2. export

  3. lorax

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

An export is a good or service produced in one country and sold to another. Imports are goods brought into a country from abroad.

Multiple choice

What is the policy of Mercantilism?

  1. Expand the country as much as possible

  2. Trade with local merchants

  3. Maximize exports and minimize imports

  4. Maximize imports and minimize exports
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Mercantilism is an economic theory that advocates for maximizing exports and minimizing imports to accumulate wealth, typically in the form of gold and silver.

Multiple choice britain and the world the beginnings of empire history

_______ is a trading system designed to protect British industry and control trade. 

  1. Protectionism

  2. Capitalism

  3. Liberalism

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

Mercantilism was an economic theory and practice prevalent in Europe from the 16th to 18th century, focusing on state-controlled trade to increase national wealth and protect domestic industry.

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.