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Importance, scope and benefits of international trade - class-XI

Description: importance, scope and benefits of international trade
Number of Questions: 21
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Tags: international trade external trade nature and scope of foreign trade business studies commerce international business tertiary and quaternary economic activities business and industry geography
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Foreign trade involves much greater risk than home trade.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. True

  2. False

Show answer
Correct Option: A
Explanation:
  • Economic dependence: Too much dependence on imports may undermine the economy of a country.
  • Restricted growth of home industries: Foreign trade may discourage the growth of domestic industries.
  • Misuse of natural resources.
  • Political exploitation.
  • Import of harmful goods.
  • Rivalry among nations.
  • Invasion of culture.

Excessive exports may exhaust the natural resources of a country in a shorter span of time.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Those exports bring money into the country, which increases the exporting nation's GDP. When a country imports goods, it buys them from foreign producers. The money spent on imports leaves the economy, and that decreases the importing nation's GDP. Net exports can be either positive or negative.

Reliance of underdeveloped countries to the developed ones for their economic development may lead to __________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. economic exploitation

  2. economic independence

  3. political independence

  4. mis-utilization of natural resources

Show answer
Correct Option: A
Explanation:

Economic theories exploitation is defined by the unequal marginal productivity of workers and wages, such that wages are lower. Exploitation is sometimes viewed to occur when a necessary agent of production receives less wages than its marginal product.

Dollar and pound sterling are the commonly preferred currencies for international trade.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

U.S. Dollar Is the Global Currency. A global currency is one that is accepted for trade throughout the world. Some of the world's currencies are accepted for most international transactions. The most popular are the U.S. dollar, the euro, and the yen.

Example of external trade is _______.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. goods produced in India and sold in Australia

  2. goods produced in India and sold in India

  3. goods produced in Australia and sold in India

  4. A and C

Show answer
Correct Option: D
Explanation:

External trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP).

Internal trade differs from external trade in which of the following ways?

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Nationality of buyers and sellers

  2. Political system and risks

  3. Mobility of factors of production

  4. All of the above

Show answer
Correct Option: D
Explanation:

Trade is the central activity in the economy. Trade not only refers to the exchange of goods and services within the country but also between two or more countries.Internal trade refers to the trade within the borders of the country. External Trade refers to the trade between two or more countries.

The Exim Policy of 1992-97 was announced in ____________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. March 1991

  2. March 1992

  3. April 1991

  4. April 1992

Show answer
Correct Option: B

The International Development Association (IDA) was established in _______________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. 1944

  2. 1947

  3. 1960

  4. 1965

Show answer
Correct Option: C

Avon/Oriflame/Tupper ware/Amway are examples of ________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. franchising

  2. BPO

  3. KPO

  4. network marketing

Show answer
Correct Option: D
Explanation:

Avon, Oriflame, Tupperware, Amway are examples of network marketing as these firms mainly target their customers for the direct marketing purposes creating a network of customers who market these products.

It is difficult to obtain reliable information concerning the financial position and business standing of the foreign traders. Therefore, ____ risk is high.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. political

  2. insurance

  3. credit

  4. all of the above

Show answer
Correct Option: C
Explanation:

Lenders, investors, and vendors often require a Certificate of Good Standing before doing business with any company.A Certificate of Good Standing is a document provided by a state's business entity filing office (often called the Secretary of State) where you formed your company (the formation state).

Which of the following conveys the difficulty of diversity of language in international trade? 

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Different languages are spoken and written in different countries of the world.

  2. All correspondence has to be done in foreign language.

  3. Price lists and catalogues are prepared in foreign languages.

  4. All of the above

Show answer
Correct Option: D
Explanation:

Trade requires communication, which can give rise to language barriers. Language-intensive tasks that are essential to trade include researching foreign markets, adapting and marketing products to foreign consumers, and communication and contracting between importing and exporting firms.

________ is/are the business regulation(s) and policy(ies) which differentiate(s) internal trade with external trade.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Tariff and taxation

  2. Import quota system

  3. Subsidies

  4. All of the above

Show answer
Correct Option: D

Which of the following is/are the characteristic(s) of international trade?

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Territorial specialization

  2. Separation of sellers from buyers

  3. Mutually acceptable currency

  4. All of the above

Show answer
Correct Option: D
Explanation:

International trade is lower costs to consumers. The lower cost is the result of two factors. First, companies can produce items overseas, saving money on labor and material costs.

The Principal instrument of inward-oriented trade policy is __________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Non Protection

  2. Protection

  3. Tariff

  4. Customs duty

Show answer
Correct Option: B

The Unified Exchange Rate System was introduced in _______.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. 1990

  2. 1991

  3. 1993

  4. 1996

Show answer
Correct Option: C

The Dual Exchange Rate System was replaced by ___________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Exim Scrips

  2. EPCG licenses

  3. LERM

  4. Unified Exchange Rate System

Show answer
Correct Option: D

The Exim Policy for 1997-2000 was effective on ________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. 1st May, 1996

  2. 1st April, 1997

  3. 26th June, 1996

  4. 26th June, 1997

Show answer
Correct Option: B

The inward-oriented trade policy is also known as _____________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. Export promotion strategy

  2. Import substitution strategy

  3. LPG

  4. Exim policy

Show answer
Correct Option: B

Export promotion was a key element of the foreign trade strategy during the _______.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. seventh Five Year Plan

  2. eighth Five Year Plan

  3. nineth Five Year Plan

  4. tenth Five Year Plan

Show answer
Correct Option: B

The important components of foreign trade of a country are _________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. terms of trade, balance of trade and balance of payment

  2. the volume of trade, the composition of trade and the direction of trade

  3. terms of trade and the volume of trade

  4. terms of trade and the direction of trade

Show answer
Correct Option: B

Initial Investment leads to a large increase in income and expenditure, due to ___________.

commerce nature and scope of foreign trade characteristics, necessity, importance, advantages and disadvantages of foreign trade importance, scope and benefits of international trade trading and economic organisations

  1. fiscal deficit

  2. multiplier effect

  3. giffen effect

  4. veblen effect

Show answer
Correct Option: B
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