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All questions of International Trade for BPSC (Bihar) Exam

What major development in trade occurred during the 15th century, involving the Portuguese, Dutch, Spaniards, and British?
  • a)
    Industrial Revolution
  • b)
    Slave Trade
  • c)
    Silk Trade
  • d)
    Maritime Trade
Correct answer is option 'B'. Can you explain this answer?

Avantika Das answered
Slave Trade:
The major development in trade that occurred during the 15th century involving the Portuguese, Dutch, Spaniards, and British was the Slave Trade.

Portuguese:
- The Portuguese were among the first European nations to engage in the slave trade, primarily in West Africa.
- They established trading posts along the African coast where they would buy enslaved Africans to be transported to the Americas.

Dutch:
- The Dutch also played a significant role in the slave trade, particularly in the transatlantic slave trade.
- They established colonies in the Americas and used enslaved Africans for labor in plantations.

Spaniards:
- The Spaniards were heavily involved in the slave trade, particularly in the Caribbean and Central and South America.
- They used enslaved Africans to work in mines and plantations.

British:
- The British became major players in the transatlantic slave trade in the 17th and 18th centuries.
- They transported millions of enslaved Africans to their colonies in the Americas to work on plantations.
The slave trade had a profound impact on the economies and societies of the countries involved, as well as on the lives of millions of Africans who were forcibly taken from their homes and sold into slavery.

Which type of trade involves an agreement between two countries to trade specific goods in which they specialize?
  • a)
    Bilateral trade
  • b)
    Multilateral trade
  • c)
    Comparative trade
  • d)
    Barter trade
Correct answer is option 'A'. Can you explain this answer?

Anjali Khanna answered
Bilateral trade involves an agreement between two countries to trade specific goods in which they specialize. It is a type of trade arrangement that focuses on the exchange of goods and services between two countries, based on their individual strengths and advantages. This type of trade agreement is often established to foster economic cooperation and increase trade volume between the two nations.

Bilateral trade agreements are typically negotiated by the governments of the two countries involved. The agreement outlines the terms and conditions of trade, including the specific goods and services that will be traded, the quantity and quality of the goods, and the rules and regulations governing the trade. These agreements are usually based on the principle of comparative advantage, which states that countries should specialize in producing goods in which they have a lower opportunity cost compared to other countries.

The advantages of bilateral trade agreements are as follows:
- Specialization: Bilateral trade allows countries to focus on producing goods that they are efficient at producing, thereby maximizing their productivity and economic output.
- Increased trade volume: By specializing in specific goods, countries can increase their exports and imports, leading to a higher volume of trade between the two nations.
- Economic growth: Bilateral trade agreements can stimulate economic growth by promoting investment, creating job opportunities, and increasing productivity.
- Enhanced diplomatic relations: Bilateral trade agreements can also strengthen diplomatic relations between countries, as they foster mutual trust and cooperation.

Bilateral trade agreements can also have some challenges and limitations:
- Limited market access: Bilateral trade agreements can restrict market access for countries that are not part of the agreement, potentially disadvantaging them in terms of international trade.
- Dependency on partner countries: Countries that rely heavily on bilateral trade agreements may become overly dependent on their partner countries, which can be risky if the partner country faces economic or political instability.
- Complexity: Negotiating and implementing bilateral trade agreements can be a complex and time-consuming process, requiring extensive negotiations and coordination between the two countries involved.
- Potential for trade disputes: Bilateral trade agreements can sometimes lead to trade disputes and conflicts, particularly if there are disagreements regarding the terms of the agreement or if one country feels that it is being treated unfairly.

In conclusion, bilateral trade is a type of trade agreement between two countries that focuses on trading specific goods in which they specialize. These agreements aim to promote economic cooperation and increase trade volume between the two nations, based on the principle of comparative advantage. While bilateral trade agreements have advantages such as specialization and increased trade volume, they also have challenges and limitations such as limited market access and potential trade disputes.

What type of trade involves many trading countries conducting trade simultaneously in goods in which they specialize?
  • a)
    Bilateral trade
  • b)
    Comparative trade
  • c)
    Multilateral trade
  • d)
    Barter trade
Correct answer is option 'C'. Can you explain this answer?

Multilateral trade involves many trading countries conducting trade simultaneously in goods in which they specialize. This type of trade allows for multiple nations to engage in trade relationships with each other.

What is the term for the practice of selling a commodity in two or more countries at a price that differs for reasons not related to costs?
  • a)
    Free trade
  • b)
    Dumping
  • c)
    Comparative advantage
  • d)
    Multilateral trade
Correct answer is option 'B'. Can you explain this answer?

Valor Academy answered
Dumping is the practice of selling a commodity in two or more countries at a price that differs for reasons not related to costs. It can disrupt fair competition and is a concern in international trade.

Which historical trade route connected Rome to China and played a significant role in long-distance trade?
  • a)
    Silk Route
  • b)
    Spice Route
  • c)
    Gold Route
  • d)
    Salt Route
Correct answer is option 'A'. Can you explain this answer?

The Silk Route was a historical trade route that connected Rome to China, spanning approximately 6000 km. Traders used this route to transport various goods, including Chinese silk, Roman wool, metals, and more, facilitating long-distance trade between the two regions.

Which principle forms the basis of international trade, emphasizing mutual benefit for trading partners?
  • a)
    Balance of Trade
  • b)
    Bilateral trade
  • c)
    Comparative advantage
  • d)
    Dumping
Correct answer is option 'C'. Can you explain this answer?

International trade is based on the principle of comparative advantage, which highlights that trade is mutually beneficial when each trading partner specializes in producing goods and services where they have a relative advantage, leading to increased efficiency and overall benefits.

What organization was formed in 1995 to promote free and fair trade among different countries of the world, succeeding the General Agreement for Tariffs and Trade (GATT)?
  • a)
    United Nations (UN)
  • b)
    World Trade Organization (WTO)
  • c)
    International Monetary Fund (IMF)
  • d)
    World Bank
Correct answer is option 'B'. Can you explain this answer?

Valor Academy answered
The World Trade Organization (WTO) was formed on January 1, 1995, to promote free and fair trade among different countries of the world. It succeeded the General Agreement for Tariffs and Trade (GATT) and is responsible for setting global trade rules and resolving trade disputes among its member nations.

Which major factor of international trade refers to the uneven distribution of resources in the world, including geology, mineral resources, and climate?
  • a)
    Transport
  • b)
    Cultural factors
  • c)
    Difference in National Resources
  • d)
    Population Factors
Correct answer is option 'C'. Can you explain this answer?

Difference in National Resources is a major factor of international trade, referring to the uneven distribution of resources in the world. This includes variations in geology, mineral resources, and climate, which influence a country's economic activities and trade specialization.

What is the term for the total value of goods and services traded in a given period of time?
  • a)
    Trade deficit
  • b)
    Volume of Trade
  • c)
    Balance of Trade
  • d)
    Bilateral trade
Correct answer is option 'B'. Can you explain this answer?

The term for the total value of goods and services traded in a given period of time is referred to as the "Volume of Trade." It measures the overall economic activity resulting from international trade.

What was the primary mode of trade in ancient times before long-distance trade developed?
  • a)
    Bilateral trade
  • b)
    Barter system
  • c)
    Multilateral trade
  • d)
    Industrial trade
Correct answer is option 'B'. Can you explain this answer?

BT Educators answered
In ancient times, before long-distance trade developed, the primary mode of trade was the barter system, where goods were exchanged directly without the use of money. This system involved the direct exchange of one good for another, and it was practiced by primitive societies.

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