International Trade Policies and Instruments Quiz

The WTO regulates international trade and enforces trade agreements.

Tariff is a common trade barrier in the form of a tax on imports.

A trade deficit occurs when a country's imports surpass its exports, leading to a negative balance of trade.

The primary purpose of a trade agreement is to establish rules and reduce barriers to trade among participating countries.

The World Bank provides financial assistance and technical support to developing countries for various development projects.

A letter of credit helps facilitate payment between the buyer and seller in international trade transactions.

Import substitution policy aims to protect domestic industries by substituting imported goods with domestically produced ones.

A trade embargo is imposed to restrict or entirely stop trade with a specific country for political or economic reasons.

Trade liberalization aims to eliminate trade barriers such as tariffs, quotas, and subsidies to promote free trade.

A trade surplus aims to boost domestic employment by exporting more than importing, leading to increased production and demand for labor.

The 'Most Favored Nation' principle involves imposing tariffs equally on all trading partners without discrimination.

GATT aims to promote fair trade practices and reduce barriers to international trade.

A quota limits the quantity of imports, while a tariff imposes a tax on imported goods.

Dumping involves selling goods in foreign markets at prices lower than production costs to gain a competitive advantage.