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All questions of Foreign Trade for Insurance Exams Exam
What is the purpose of foreign trade?- a)To reduce the cost of goods
- b)To promote economic growth
- c)To create trade barriers
- d)To avoid international cooperation
Correct answer is option 'B'. Can you explain this answer?
What is the purpose of foreign trade?
a)
To reduce the cost of goods
b)
To promote economic growth
c)
To create trade barriers
d)
To avoid international cooperation
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Vikram Mehta answered |
Foreign trade plays a crucial role in promoting economic growth by allowing countries to specialize in producing goods and services they are efficient at and exchanging them with others for items they need. This results in increased productivity, improved resource allocation, and overall economic development.
Which international organization deals with the rules of trade between nations and aims to promote free and fair trade?- a)International Monetary Fund (IMF)
- b)World Trade Organization (WTO)
- c)World Bank
- d)United Nations (UN)
Correct answer is option 'B'. Can you explain this answer?
Which international organization deals with the rules of trade between nations and aims to promote free and fair trade?
a)
International Monetary Fund (IMF)
b)
World Trade Organization (WTO)
c)
World Bank
d)
United Nations (UN)
|
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Vikram Mehta answered |
The WTO is an international organization that deals with the global rules of trade between nations. Its main goal is to ensure that trade flows as smoothly, predictably, and freely as possible, promoting fair trade practices and reducing trade barriers.
Which of the following best defines foreign trade?- a)Trade between two foreign countries
- b)Trade between a country and its territories
- c)Trade between a country and other countries
- d)Trade between two continents
Correct answer is option 'C'. Can you explain this answer?
Which of the following best defines foreign trade?
a)
Trade between two foreign countries
b)
Trade between a country and its territories
c)
Trade between a country and other countries
d)
Trade between two continents
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|
Vikram Mehta answered |
Foreign trade refers to the exchange of goods and services between one country and other countries. It involves imports (goods and services brought into a country) and exports (goods and services sent out of a country).
What does the term "balance of payments" refer to in foreign trade?- a)A country's economic growth rate
- b)A country's trade surplus or deficit
- c)A country's total exports
- d)A country's overall GDP
Correct answer is option 'B'. Can you explain this answer?
What does the term "balance of payments" refer to in foreign trade?
a)
A country's economic growth rate
b)
A country's trade surplus or deficit
c)
A country's total exports
d)
A country's overall GDP
|
|
Vikram Mehta answered |
The balance of payments is a record of all economic transactions made between the residents of a country and the rest of the world during a specific period. It includes trade in goods and services, investment income, and transfer payments. If exports exceed imports, the country has a trade surplus, and if imports exceed exports, it has a trade deficit.
Which international organization deals with rules of trade between nations?- a)United Nations (UN)
- b)World Trade Organization (WTO)
- c)International Monetary Fund (IMF)
- d)World Bank (WB)
Correct answer is option 'B'. Can you explain this answer?
Which international organization deals with rules of trade between nations?
a)
United Nations (UN)
b)
World Trade Organization (WTO)
c)
International Monetary Fund (IMF)
d)
World Bank (WB)
|
|
Vikram Mehta answered |
The World Trade Organization (WTO) is an international organization that deals with the global rules of trade between nations. It helps ensure that trade flows as smoothly, predictably, and freely as possible, fostering economic cooperation among countries.
Which of the following is an example of an export?- a)A country importing machinery for industrial use
- b)A country sending goods to another country for sale
- c)A country purchasing oil from another country
- d)A country receiving foreign aid in the form of food supplies
Correct answer is option 'B'. Can you explain this answer?
Which of the following is an example of an export?
a)
A country importing machinery for industrial use
b)
A country sending goods to another country for sale
c)
A country purchasing oil from another country
d)
A country receiving foreign aid in the form of food supplies
|
|
Vikram Mehta answered |
An export refers to goods and services produced within a country and sent to another country for sale or trade.
The "Most Favored Nation" (MFN) status in international trade refers to:- a)Favoring a particular country over others in trade deals
- b)Extending the best possible trade terms to all member countries
- c)Granting exclusive trade privileges to the wealthiest nations
- d)Encouraging protectionism in international trade
Correct answer is option 'B'. Can you explain this answer?
The "Most Favored Nation" (MFN) status in international trade refers to:
a)
Favoring a particular country over others in trade deals
b)
Extending the best possible trade terms to all member countries
c)
Granting exclusive trade privileges to the wealthiest nations
d)
Encouraging protectionism in international trade
|
|
Vikram Mehta answered |
The "Most Favored Nation" (MFN) status is a trade principle where a country extends the best trade terms and concessions it offers to any one nation to all other member countries. This principle promotes non-discrimination and fair trade practices.
Which of the following factors can lead to an improvement in a country's trade balance?- a)Decrease in exports and increase in imports
- b)Increase in exports and decrease in imports
- c)Increase in both exports and imports
- d)Decrease in both exports and imports
Correct answer is option 'B'. Can you explain this answer?
Which of the following factors can lead to an improvement in a country's trade balance?
a)
Decrease in exports and increase in imports
b)
Increase in exports and decrease in imports
c)
Increase in both exports and imports
d)
Decrease in both exports and imports
|
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Vikram Mehta answered |
Improving a country's trade balance requires increasing exports (earning more from selling goods abroad) and decreasing imports (spending less on buying goods from foreign countries).
What is the primary purpose of foreign trade?- a)Increase government revenue
- b)Promote cultural exchange
- c)Boost economic growth
- d)Encourage tourism
Correct answer is option 'C'. Can you explain this answer?
What is the primary purpose of foreign trade?
a)
Increase government revenue
b)
Promote cultural exchange
c)
Boost economic growth
d)
Encourage tourism
|
|
Vikram Mehta answered |
The primary purpose of foreign trade is to promote economic growth and development by allowing countries to access goods and services they cannot produce efficiently. It fosters specialization, creates job opportunities, and encourages international cooperation.
What is the trade balance of a country when exports exceed imports?- a)Trade surplus
- b)Trade deficit
- c)Trade equilibrium
- d)Trade embargo
Correct answer is option 'A'. Can you explain this answer?
What is the trade balance of a country when exports exceed imports?
a)
Trade surplus
b)
Trade deficit
c)
Trade equilibrium
d)
Trade embargo
|
|
Vikram Mehta answered |
When a country exports more than it imports, it is said to have a trade surplus. This means the country is earning more from its exports, which can lead to increased foreign exchange reserves and potentially a stronger currency.
Which of the following is a key feature of free trade zones?- a)High import tariffs
- b)Strict import quotas
- c)Reduced trade barriers
- d)Limitation on exports
Correct answer is option 'C'. Can you explain this answer?
Which of the following is a key feature of free trade zones?
a)
High import tariffs
b)
Strict import quotas
c)
Reduced trade barriers
d)
Limitation on exports
|
|
Vikram Mehta answered |
Free trade zones are areas where trade barriers, such as tariffs and quotas, are reduced or eliminated to encourage international trade and attract foreign investment. These zones help boost economic activity and promote export-oriented industries.
Which of the following best defines foreign trade?- a)Trade between two countries
- b)Trade within a country's borders
- c)Trade between two cities
- d)Trade within a continent
Correct answer is option 'A'. Can you explain this answer?
Which of the following best defines foreign trade?
a)
Trade between two countries
b)
Trade within a country's borders
c)
Trade between two cities
d)
Trade within a continent
|
|
Vikram Mehta answered |
Foreign trade refers to the exchange of goods and services between different countries. It involves imports (goods and services brought into a country) and exports (goods and services sent out of a country) and plays a crucial role in a nation's economic growth.
What does FDI stand for in the context of foreign trade?- a)Foreign Debt Investment
- b)Foreign Dollar Investment
- c)Foreign Direct Investment
- d)Foreign Domestic Investment
Correct answer is option 'C'. Can you explain this answer?
What does FDI stand for in the context of foreign trade?
a)
Foreign Debt Investment
b)
Foreign Dollar Investment
c)
Foreign Direct Investment
d)
Foreign Domestic Investment
|
|
Vikram Mehta answered |
FDI refers to the investment made by individuals or companies from one country into business interests located in another country. It is a crucial component of foreign trade and can bring capital, technology, and expertise to the receiving country.
What is the primary objective of imposing tariffs on imports?- a)To increase international cooperation
- b)To reduce the cost of imported goods
- c)To protect domestic industries from foreign competition
- d)To encourage free trade among countries
Correct answer is option 'C'. Can you explain this answer?
What is the primary objective of imposing tariffs on imports?
a)
To increase international cooperation
b)
To reduce the cost of imported goods
c)
To protect domestic industries from foreign competition
d)
To encourage free trade among countries
|
|
Vikram Mehta answered |
Tariffs are taxes or duties imposed on imported goods to make them more expensive than domestically produced goods, thereby protecting domestic industries from foreign competition and encouraging consumers to buy locally produced goods.
A country exporting more than it imports is said to have a:- a)Trade surplus
- b)Trade deficit
- c)Balanced trade
- d)Trade embargo
Correct answer is option 'A'. Can you explain this answer?
A country exporting more than it imports is said to have a:
a)
Trade surplus
b)
Trade deficit
c)
Balanced trade
d)
Trade embargo
|
|
Vikram Mehta answered |
When a country exports more than it imports, it is said to have a trade surplus. This situation indicates that the country is earning more foreign exchange than it is spending, which is beneficial for its economy.
Which of the following organizations focuses on promoting economic cooperation and trade among Southeast Asian nations?- a)European Union (EU)
- b)North American Free Trade Agreement (NAFTA)
- c)Association of Southeast Asian Nations (ASEAN)
- d)South Asian Association for Regional Cooperation (SAARC)
Correct answer is option 'C'. Can you explain this answer?
Which of the following organizations focuses on promoting economic cooperation and trade among Southeast Asian nations?
a)
European Union (EU)
b)
North American Free Trade Agreement (NAFTA)
c)
Association of Southeast Asian Nations (ASEAN)
d)
South Asian Association for Regional Cooperation (SAARC)
|
|
Vikram Mehta answered |
ASEAN is a regional intergovernmental organization comprising ten Southeast Asian countries. Its primary goals include promoting economic growth, social progress, and cultural development in the region, as well as fostering regional peace and stability.
What is the purpose of the Most Favored Nation (MFN) principle in international trade?- a)To grant special privileges to developing nations
- b)To offer preferential treatment to specific countries
- c)To eliminate discriminatory trade practices
- d)To establish trade blocs among neighboring countries
Correct answer is option 'C'. Can you explain this answer?
What is the purpose of the Most Favored Nation (MFN) principle in international trade?
a)
To grant special privileges to developing nations
b)
To offer preferential treatment to specific countries
c)
To eliminate discriminatory trade practices
d)
To establish trade blocs among neighboring countries
|
|
Vikram Mehta answered |
The Most Favored Nation (MFN) principle requires a country to treat all its trading partners equally and without discrimination. If a country grants favorable treatment, such as reduced tariffs, to one trading partner, it must extend the same treatment to all other trading partners.
Which of the following is an example of a non-tariff trade barrier?- a)Import quota
- b)Export subsidy
- c)Free trade agreement
- d)Currency exchange rate
Correct answer is option 'A'. Can you explain this answer?
Which of the following is an example of a non-tariff trade barrier?
a)
Import quota
b)
Export subsidy
c)
Free trade agreement
d)
Currency exchange rate
|
|
Vikram Mehta answered |
An import quota is a non-tariff trade barrier that limits the quantity or value of specific goods that a country can import within a given period. It aims to restrict foreign competition and protect domestic industries.
Which of the following trade barriers is NOT a non-tariff barrier?- a)Quotas
- b)Embargoes
- c)Subsidies
- d)Tariffs
Correct answer is option 'D'. Can you explain this answer?
Which of the following trade barriers is NOT a non-tariff barrier?
a)
Quotas
b)
Embargoes
c)
Subsidies
d)
Tariffs
|
|
Vikram Mehta answered |
Tariffs are a form of tariff barrier, as they impose taxes on imported goods. Non-tariff barriers include quotas (restrictions on the quantity of imports), embargoes (complete prohibition of trade), and subsidies (financial assistance to domestic industries).
Which trade agreement aims to promote free trade among North American countries?- a)ASEAN Free Trade Area (AFTA)
- b)North American Free Trade Agreement (NAFTA)
- c)European Union (EU)
- d)Trans-Pacific Partnership (TPP)
Correct answer is option 'B'. Can you explain this answer?
Which trade agreement aims to promote free trade among North American countries?
a)
ASEAN Free Trade Area (AFTA)
b)
North American Free Trade Agreement (NAFTA)
c)
European Union (EU)
d)
Trans-Pacific Partnership (TPP)
|
|
Vikram Mehta answered |
NAFTA was a trade agreement among Canada, Mexico, and the United States, aiming to eliminate trade barriers and promote free trade in North America. It was later replaced by the United States-Mexico-Canada Agreement (USMCA).
Chapter doubts & questions for Foreign Trade - Lucent for GK 2025 is part of Insurance Exams exam preparation. The chapters have been prepared according to the Insurance Exams exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Insurance Exams 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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