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

What is the name of the India-ASEAN free trade agreement?

  1. India-ASEAN Free Trade Agreement (IAFTA)

  2. ASEAN-India Free Trade Agreement (AIFTA)

  3. India-ASEAN Comprehensive Economic Partnership Agreement (IA-CEPA)

  4. ASEAN-India Comprehensive Economic Partnership Agreement (AI-CEPA)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The India-ASEAN Free Trade Agreement (IAFTA) is a free trade agreement between India and ASEAN. It was signed in 2009 and came into effect in 2010. The agreement covers trade in goods, services, and investment.

Multiple choice

What is the main reason for countries to engage in agricultural trade?

  1. To increase food security

  2. To gain access to new markets

  3. To reduce the cost of food

  4. To improve the quality of food
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Countries engage in agricultural trade to gain access to new markets for their agricultural products. This allows them to increase their exports and earn foreign exchange.

Multiple choice

How does trade liberalization affect agricultural markets?

  1. It increases competition and lowers prices

  2. It increases prices and reduces competition

  3. It has no effect on agricultural markets

  4. It depends on the specific agricultural product
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Trade liberalization increases competition in agricultural markets, which leads to lower prices for consumers.

Multiple choice

What are some of the key international agreements that govern agricultural trade?

  1. The World Trade Organization (WTO)

  2. The North American Free Trade Agreement (NAFTA)

  3. The European Union (EU)

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

The World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), and the European Union (EU) are all key international agreements that govern agricultural trade.

Multiple choice

How can developed countries help to support sustainable agricultural trade in developing countries?

  1. By providing financial assistance

  2. By providing technical assistance

  3. By providing market access

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

Developed countries can help to support sustainable agricultural trade in developing countries by providing financial assistance, technical assistance, and market access.

Multiple choice

What are some of the key issues that are being debated in the current global negotiations on agricultural trade?

  1. The reduction of trade barriers

  2. The provision of subsidies to farmers

  3. The protection of intellectual property rights

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

The key issues that are being debated in the current global negotiations on agricultural trade include the reduction of trade barriers, the provision of subsidies to farmers, and the protection of intellectual property rights.

Multiple choice

The residual method of classification of goods is used when:

  1. The goods are not specifically mentioned in any tariff heading

  2. The goods are mentioned in more than one tariff heading

  3. Both of the above

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

The residual method of classification of goods is used when the goods are not specifically mentioned in any tariff heading or when the goods are mentioned in more than one tariff heading.

Multiple choice

Which trade policy involves imposing tariffs or other restrictions on imported goods to protect domestic industries?

  1. Free Trade

  2. Protectionism

  3. Mercantilism

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

Protectionism is a trade policy that uses tariffs, quotas, or other barriers to restrict imports and protect domestic industries from foreign competition.

Multiple choice

What is the term used to describe the situation when a country has a trade deficit with one country but a trade surplus with another country?

  1. Bilateral Trade Deficit

  2. Bilateral Trade Surplus

  3. Trade Imbalance

  4. Trade Equilibrium
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Trade imbalance refers to the situation when a country's imports exceed its exports, resulting in a trade deficit, or when its exports exceed its imports, resulting in a trade surplus.

Multiple choice

Which economic theory suggests that countries should impose tariffs on imported goods to generate revenue for the government?

  1. Mercantilism

  2. Absolute Advantage Theory

  3. Comparative Advantage Theory

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

Mercantilism is an economic theory that advocates for government intervention in trade to promote national wealth and power by imposing tariffs and other restrictions on imports.

Multiple choice

Which trade policy involves reducing or eliminating tariffs and other trade barriers between countries?

  1. Free Trade

  2. Protectionism

  3. Mercantilism

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

Free trade is a trade policy that advocates for the reduction or elimination of tariffs and other trade barriers between countries, allowing goods and services to flow freely across borders.

Multiple choice

What is the term used to describe the situation when a country's imports exceed its exports?

  1. Trade Deficit

  2. Trade Surplus

  3. Trade Imbalance

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

Trade deficit occurs when a country's imports exceed its exports, resulting in a negative balance of trade.

Multiple choice

Which trade policy involves imposing quotas or other quantitative restrictions on imported goods to protect domestic industries?

  1. Free Trade

  2. Protectionism

  3. Mercantilism

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

Protectionism is a trade policy that uses quotas, embargoes, or other quantitative restrictions to limit the quantity of imported goods, thereby protecting domestic industries from foreign competition.

Multiple choice

What is the term used to describe the situation when a country's exports exceed its imports?

  1. Trade Deficit

  2. Trade Surplus

  3. Trade Imbalance

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

Trade surplus occurs when a country's exports exceed its imports, resulting in a positive balance of trade.

Multiple choice

What is the term used to describe the situation when a country's imports and exports are equal?

  1. Trade Deficit

  2. Trade Surplus

  3. Trade Imbalance

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

Trade equilibrium occurs when a country's imports and exports are equal, resulting in a balanced trade.