INTERNATIONAL ECONOMICS THEORY AND
POLICY EXAM PREP QUESTIONS AND
ANSWERS FULLY VERIFIED
◉ What is International Trade?
Answer: International Trade refers to the exchange of goods and
services between two or more countries, where countries export
goods they produce efficiently and import goods that are costly or
unavailable domestically.
◉ What are Terms of Trade?
Answer: Terms of Trade is the rate at which one country's exports
are exchanged for another country's imports, reflecting the
purchasing power of exports.
◉ What is Devaluation?
Answer: Devaluation is the deliberate reduction in the external value
of a country's currency by the government or central bank to
encourage exports and reduce imports.
◉ What is a Quota?
,Answer: A Quota is a quantitative restriction imposed by the
government on the imports or exports of goods during a specific
period, limiting the quantity of goods traded internationally.
◉ What is Dumping?
Answer: Dumping is selling goods in foreign markets at prices lower
than domestic prices or below production cost to capture
international markets.
◉ What is an Exchange Rate?
Answer: An Exchange Rate is the rate at which one country's
currency is exchanged for another country's currency.
◉ What is the full form of IMF?
Answer: IMF stands for International Monetary Fund.
◉ What is the full form of WTO?
Answer: WTO stands for World Trade Organization.
◉ What is EXIM Policy?
Answer: EXIM Policy refers to the Export-Import Policy framed by
the government to regulate foreign trade through rules related to
exports, imports, and trade promotion.
, ◉ What is Regionalism in Trade?
Answer: Regionalism in trade refers to economic cooperation among
neighboring countries through regional trade agreements to
promote free trade and economic integration.
◉ Why is International Economics important?
Answer: International Economics is important as it studies
economic relations among nations, helping to understand trade,
foreign exchange, and the impact of globalization.
◉ What are the advantages of International Trade?
Answer: Advantages include efficient resource utilization, increased
world production, higher standards of living, foreign exchange
earnings, industrial development, employment generation,
technology transfer, and economic growth.
◉ What is the Theory of Comparative Advantage?
Answer: The Theory of Comparative Advantage, proposed by David
Ricardo, states that countries should specialize in producing goods
in which they have a lower comparative cost.
◉ What are the assumptions of the Theory of Comparative
Advantage?
POLICY EXAM PREP QUESTIONS AND
ANSWERS FULLY VERIFIED
◉ What is International Trade?
Answer: International Trade refers to the exchange of goods and
services between two or more countries, where countries export
goods they produce efficiently and import goods that are costly or
unavailable domestically.
◉ What are Terms of Trade?
Answer: Terms of Trade is the rate at which one country's exports
are exchanged for another country's imports, reflecting the
purchasing power of exports.
◉ What is Devaluation?
Answer: Devaluation is the deliberate reduction in the external value
of a country's currency by the government or central bank to
encourage exports and reduce imports.
◉ What is a Quota?
,Answer: A Quota is a quantitative restriction imposed by the
government on the imports or exports of goods during a specific
period, limiting the quantity of goods traded internationally.
◉ What is Dumping?
Answer: Dumping is selling goods in foreign markets at prices lower
than domestic prices or below production cost to capture
international markets.
◉ What is an Exchange Rate?
Answer: An Exchange Rate is the rate at which one country's
currency is exchanged for another country's currency.
◉ What is the full form of IMF?
Answer: IMF stands for International Monetary Fund.
◉ What is the full form of WTO?
Answer: WTO stands for World Trade Organization.
◉ What is EXIM Policy?
Answer: EXIM Policy refers to the Export-Import Policy framed by
the government to regulate foreign trade through rules related to
exports, imports, and trade promotion.
, ◉ What is Regionalism in Trade?
Answer: Regionalism in trade refers to economic cooperation among
neighboring countries through regional trade agreements to
promote free trade and economic integration.
◉ Why is International Economics important?
Answer: International Economics is important as it studies
economic relations among nations, helping to understand trade,
foreign exchange, and the impact of globalization.
◉ What are the advantages of International Trade?
Answer: Advantages include efficient resource utilization, increased
world production, higher standards of living, foreign exchange
earnings, industrial development, employment generation,
technology transfer, and economic growth.
◉ What is the Theory of Comparative Advantage?
Answer: The Theory of Comparative Advantage, proposed by David
Ricardo, states that countries should specialize in producing goods
in which they have a lower comparative cost.
◉ What are the assumptions of the Theory of Comparative
Advantage?
