#1
Which of the following is an example of a trade barrier?
Subsidies
ExplanationFinancial aid given to domestic industries to make their products cheaper than imports.
#2
What is the purpose of tariffs in international trade?
To discourage imports
ExplanationThey increase the cost of imported goods, making them less attractive compared to domestically produced goods.
#3
What is the term used to describe the situation where a country exports more than it imports?
Trade surplus
ExplanationWhen the value of exports exceeds the value of imports.
#4
What is the primary goal of import quotas?
To limit the quantity of imported goods
ExplanationTo restrict the amount of foreign goods that can enter a country's market.
#5
What is the main purpose of export subsidies?
To promote exports
ExplanationFinancial assistance given to domestic producers to encourage them to export more.
#6
Which organization is responsible for overseeing international trade rules and agreements?
World Trade Organization (WTO)
ExplanationWTO establishes and enforces the rules of trade between countries.
#7
What is the 'dumping' practice in international trade?
Selling goods below production cost in foreign markets
ExplanationIt involves exporting goods at prices lower than what they would sell for in the home market or below the cost of production.
#8
What is the main objective of protectionist policies in international trade?
To protect domestic industries
ExplanationTo shield domestic industries from foreign competition through measures like tariffs and quotas.
#9
Which economic theory suggests that a country should specialize in producing goods for which it has a comparative advantage?
Comparative advantage
ExplanationCountries should focus on producing goods they can produce more efficiently compared to others, as per their resources and technology.
#10
What is the term for a situation where a country's currency is deliberately undervalued to boost exports?
Currency devaluation
ExplanationLowering the value of a country's currency to make exports cheaper and more competitive in international markets.
#11
Which of the following is an example of a non-tariff barrier to trade?
Import quotas
ExplanationRestrictions on the quantity of a good that can be imported, instead of using tariffs.
#12
Which of the following is an example of a trade remedy measure used to counteract unfair trade practices?
Anti-dumping duties
ExplanationTaxes imposed on imported goods suspected to be sold at less than fair market value.