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 are the arguments against protectionism?

  1. It raises prices for consumers.

  2. It reduces the efficiency of production.

  3. It leads to retaliation from other countries.

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

The arguments against protectionism include raising prices for consumers, reducing the efficiency of production, and leading to retaliation from other countries.

Multiple choice

What is the most common type of tariff?

  1. Ad valorem tariff

  2. Specific tariff

  3. Compound tariff

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

An ad valorem tariff is a tax that is levied as a percentage of the value of the imported goods.

Multiple choice

What is the World Trade Organization (WTO)?

  1. An international organization that regulates trade between countries.

  2. An international organization that promotes free trade between countries.

  3. An international organization that resolves trade disputes between countries.

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

The World Trade Organization (WTO) is an international organization that regulates trade between countries, promotes free trade between countries, and resolves trade disputes between countries.

Multiple choice

What is the most important function of the WTO?

  1. To regulate trade between countries.

  2. To promote free trade between countries.

  3. To resolve trade disputes between countries.

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

The most important function of the WTO is to regulate trade between countries, promote free trade between countries, and resolve trade disputes between countries.

Multiple choice

What are the main principles of the WTO?

  1. Non-discrimination

  2. Transparency

  3. Most-favored-nation treatment

  4. National treatment

  5. All of the above.
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

The main principles of the WTO are non-discrimination, transparency, most-favored-nation treatment, and national treatment.

Multiple choice

What is the most important agreement of the WTO?

  1. The General Agreement on Tariffs and Trade (GATT)

  2. The Agreement on Agriculture

  3. The Agreement on Textiles and Clothing

  4. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

  5. All of the above.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The most important agreement of the WTO is the General Agreement on Tariffs and Trade (GATT).

Multiple choice

What is an import tariff?

  1. A tax imposed on imported agricultural products

  2. A tax imposed on exported agricultural products

  3. A subsidy provided to domestic producers of agricultural products

  4. A subsidy provided to foreign producers of agricultural products
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An import tariff is a tax imposed on imported agricultural products, typically used to protect domestic producers from foreign competition.

Multiple choice

What is an export subsidy?

  1. A tax imposed on imported agricultural products

  2. A tax imposed on exported agricultural products

  3. A subsidy provided to domestic producers of agricultural products

  4. A subsidy provided to foreign producers of agricultural products
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An export subsidy is a subsidy provided to domestic producers of agricultural products, typically used to make their products more competitive in foreign markets.

Multiple choice

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

  1. Trade surplus.

  2. Trade deficit.

  3. Balance of trade.

  4. Terms of trade.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A trade surplus occurs when a country's exports exceed its imports, resulting in a positive net export balance.

Multiple choice

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

  1. Trade surplus.

  2. Trade deficit.

  3. Balance of trade.

  4. Terms of trade.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A trade deficit occurs when a country's imports exceed its exports, resulting in a negative net export balance.

Multiple choice

What is the term used to describe the ratio of a country's exports to its imports?

  1. Trade surplus.

  2. Trade deficit.

  3. Balance of trade.

  4. Terms of trade.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The terms of trade are calculated by dividing a country's export price index by its import price index, and they measure the relative prices of a country's exports and imports.

Multiple choice

What is the term used to describe the process of opening up an economy to foreign trade and investment?

  1. Divestiture

  2. Deregulation

  3. Liberalization

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

Liberalization refers to the process of opening up an economy to foreign trade and investment.

Multiple choice

Which of the following is NOT a form of economic exploitation practiced by colonial powers?

  1. Forced labor

  2. Cash crop production

  3. Taxation

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

Free trade was not a form of economic exploitation practiced by colonial powers, as it involved the exchange of goods and services between countries on equal terms.

Multiple choice

What is Kautilya's view on the role of trade and commerce in the economy?

  1. Trade and commerce are essential for economic growth and prosperity

  2. Trade and commerce are a necessary evil and should be regulated

  3. Trade and commerce are a waste of resources and should be discouraged

  4. Trade and commerce are irrelevant to the economy and should be ignored
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Kautilya believed that trade and commerce are essential for economic growth and prosperity.

Multiple choice

What are the three main types of trade, according to Kautilya?

  1. Internal trade, external trade, and transit trade

  2. Wholesale trade, retail trade, and black market trade

  3. Land trade, sea trade, and air trade

  4. Legal trade, illegal trade, and semi-legal trade
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Kautilya identified internal trade, external trade, and transit trade as the three main types of trade.