Foreign Trade


20 Questions MCQ Test Economy Traditional for UPSC (Civil Services) Prelims | Foreign Trade


Description
This mock test of Foreign Trade for UPSC helps you for every UPSC entrance exam. This contains 20 Multiple Choice Questions for UPSC Foreign Trade (mcq) to study with solutions a complete question bank. The solved questions answers in this Foreign Trade quiz give you a good mix of easy questions and tough questions. UPSC students definitely take this Foreign Trade exercise for a better result in the exam. You can find other Foreign Trade extra questions, long questions & short questions for UPSC on EduRev as well by searching above.
QUESTION: 1

 Which of the following is a part of capital account?

Solution:

Capital account is classified into 3 parts in India- private, banking and official capital.

QUESTION: 2

Consider the following statements and identify the right ones.
i. A double entry system of record of all economic transactions between the residents of a country and rest of the world is called balance of trade
ii. All transactions related to goods, services or income are classified as capital account.

Solution:

A double entry system of record of all economic transactions between the residents of a country and rest of the world is called balance of payments. All transactions related to goods, services or income are classified as current account.

QUESTION: 3

The investment in productive assets and participation in management as stake holders in business enterprises is

Solution:

The investment in productive assets and participation in management as stake holders in business enterprises is foreign direct investment.

QUESTION: 4

The portfolio investment by foreign institutional investors is called

Solution:

The portfolio investment by foreign institutional investors is called foreign institutional investment.

QUESTION: 5

Consider the following statements and identify the right ones.
i. India adopted LERMS in 1992
ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.

Solution:

Liberalized Exchange Rate Management System was a dual exchange rate system in which 40% of forex earnings were converted at official exchange rate and 60% at market determined exchange rate.

QUESTION: 6

 Consider the following statements and identify the right ones.
i. IMF came into existence as an outcome on Bretton Woods agreement
ii. France was the 1st country to borrow from IMF 

Solution:

IMF oversees the international monetary system. 

QUESTION: 7

Consider the following statements and identify the right ones.
i. The executive board is the highest decision making body of IMF
ii. The Board of Governors meets twice a year.

Solution:

The Board of Governors is the highest decision making body of IMF. The Board of Governors meets once a year.

QUESTION: 8

 Consider the following statements and identify the right ones.
i. Executive board conducts the business of the IMF
ii. It meets once in a year

Solution:

Executive board conducts the business of the IMF. It functions in continuous session and meets several times in a week.

QUESTION: 9

 Consider the following statements and identify the right ones.
i. The day to day work of IMF is conducted by the board of governors
ii. Selected nations who are members of IMF are given a quota 

Solution:

The day to day work of IMF is conducted by the executive board. All the nations are assigned a quota.

QUESTION: 10

 Consider the following statements and identify the right ones
i. The quota does not decide voting power in IMF’s decisions 
ii. Quota subscription constitutes most of the financial resources of IMF

Solution:

The quota decides voting power in IMF’s decisions. Quota subscription constitutes most of the financial resources of IMF.

QUESTION: 11

Consider the following statements and identify the right ones.
i. SDRs cannot voluntarily be exchanged among members for currencies
ii. US is the largest member of the IMF

Solution:

SDRs can voluntarily be exchanged among members for currencies.

QUESTION: 12

Which of the following is an institution of World Bank?

Solution:

World Bank has five institutions- IBRD, IDA, International Finance Corporation, MIGA and ISCID.

QUESTION: 13

Consider the following statements and identify the right ones.
i. Low income countries are eligible to receive low interest loans from IDA
ii. India is eligible for a blend of financial assistance from IDA and IBRD

Solution:

IBRD aims at reducing poverty in middle income and credit-worthy poor countries.

QUESTION: 14

Which of the following is not an objective of World Bank?

Solution:

World Bank provides long term capital to member countries for economic reconstruction and development.

QUESTION: 15

 Which of the following is known as soft loan window of the World Bank?

Solution:

IDA was established in 1960. It aims at reducing poverty by providing interest free credits and grants for economic growth.

QUESTION: 16

The investment arm of the world bank is

Solution:

IFC was established in 1956. It is known as the investment arm of the World Bank.

QUESTION: 17

The insurance arm of world bank is

Solution:

MIGA is known as the insurance arm of World Bank. It was established in 1988.

QUESTION: 18

Consider the following statements and identify the right ones.
i. IFC is governed by board of governors
 ii. It mobilizes capital in international capital markets

Solution:

International Finance Corporation is governed by board of governors who are represented by member countries.

QUESTION: 19

Consider the following statements and identify the right ones.
i. ICSID is a multilateral treaty formulated by executive directors of IBRD
ii. All the countries have deposited their instruments of ratification, acceptance of the convention.

Solution:

Not all the countries have deposited their instruments of ratification, acceptance of the convention.

QUESTION: 20

 Consider the following statements and identify the right ones.
i. The head of WTO is known as director general
ii. The WTO summit is held once in very year

Solution:

The WTO summit is held once in two years. The summit is known as Ministerial Conference.

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