Economics ยท 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

Dhows played a critical role in the

  1. trans-Saharan trade.

  2. Indian Ocean trade.

  3. Atlantic Ocean trade

  4. Mediterranean Sea trade
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dhows are traditional sailing vessels with lateen sails that were essential for navigating the monsoon winds of the Indian Ocean trade network.

Multiple choice

Which of these does trade writing not relate to?

  1. Means to record financial exchanges

  2. Method used to orally "glue" together urban populations

  3. Record quantity and meaning

  4. Paved way for laws, literature, and documents
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Early writing systems were primarily developed for accounting, recording transactions, and administrative purposes in urban centers. It was not used to orally bind populations, as writing is by definition a visual, not oral, medium.

Multiple choice

The export surplus during the British rule was used to __________.

  1. To import invisible items

  2. To meet expenses on war fought by British

  3. To meet expenses incurred by the British setup offices in Britain

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

The export surplus generated by India was used to pay for the 'drain of wealth', including administrative expenses in Britain, war costs, and invisible items like shipping and insurance services.

Multiple choice

What is the tax or duty on imports called?

  1. Quota

  2. Tariff

  3. Export

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

A tariff is a tax imposed by a government on goods and services imported from other countries, used to protect domestic industries or generate revenue.

Multiple choice

What does the FTC regulate?

  1. Stocks and Bonds

  2. Fair Trade

  3. the Environment

  4. Radio and TV
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Federal Trade Commission (FTC) is responsible for promoting fair competition and protecting consumers from unfair trade practices.

Multiple choice

How important is the WTO?

  1. There are 164 members including China

  2. Very, very important for trade

  3. It has its own GDP and covers more than 90% of global trade

  4. Nearly every country in the world is a member so it must be
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The WTO has 164 member countries including China. This makes it a significant global organization. Options B and D express opinions about importance without facts. Option C is incorrect - the WTO does not have its own GDP.

Multiple choice

A protective tariff is a tax on imported goods which is designed to

  1. increase domestic purchases

  2. increase foreign revenue

  3. increase American exports

  4. establish income tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A protective tariff increases the cost of imported goods, making domestic products more competitive and encouraging consumers to purchase them instead of foreign alternatives.

Multiple choice

A protective tariff is a tax on imported goods which is designed to

  1. increase domestic purchases

  2. increase foreign revenue

  3. increase American exports

  4. establish income tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A protective tariff makes imported goods more expensive, which encourages consumers to purchase cheaper, domestically produced alternatives, thereby supporting local industries.

Multiple choice

What obstacles have slowed the attempts to liberalize world trade?

  1. Clashing political regimes

  2. Terrorism

  3. Both A & B

  4. Varied economic & education development
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Liberalization of world trade is hindered by various factors, including political instability, security concerns, and significant disparities in economic development and education levels between nations. Option D captures the structural and developmental challenges that complicate international trade agreements.

Multiple choice

What improves global trade?

  1. Transportation improvements

  2. Invading countries & making them install a new government

  3. Removal of tariffs

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

Why are some countries in North Africa and Southwest Asia so wealthy?

  1. They have jobs for guest workers.

  2. They sell crops to the whole world.

  3. They have oil reserves needed by the world.

  4. Their shipping industry is used by many countries.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The significant wealth of many countries in Southwest Asia is primarily derived from the extraction and export of vast oil and natural gas reserves, which are essential to the global economy.