Chapter 9
International Trade
Exercises
1. Choose the correct answer from the following four possible answers:-
(i) The largest ports in the world are:-
a) Naval port, b) Oil port,
c) Community ports, d) Industrial ports.
(ii) Which of the following continents has the largest flow of world trade:-
a) Asia, b) North America,
c) Europe, d) Africa.
(iii) Which South American country belongs to OPEC:-
a) Brazil, b) Chile,
c) Venezuela, d) Peru.
Answer: c) Venezuela
(Iv) India is an associate member of which of the following trade sectors:-
(a) SAFTA, (b) OECD,
c) ASEAN, d) OPEC
Answer: a) SAFTA
2. Answer the following questions in about 30 words:
(i) What is the primary function of the WTO?
Answer: The primary function of the WTO is to remove excise duties and other barriers to protect against high prices. The WTO prepares and adopts world trade policies and makes efforts to resolve differences among member states.
(ii) Why is a negative balance of payments adverse for the country?
3. Answer the following questions in about 150 words.
(i) Explain the importance of ports for trade.
Answer: Ports are essential for trade. This is because ports are the main gateway to international trade. Both goods and passengers move from one country to another through ports and harbors. Ports provide loading and unloading of imported and exported goods as well as general and air-conditioned warehouses as required. The amount of cargo handled daily in a port, the number and size of ships in and out of a port, etc. give an idea of the busyness and importance of the port. The amount of cargo indicates how rich the port is in terms of what the port is.
Some ports are created for the collection of industrial raw materials and the collection and distribution of products. Other packaged goods are based on imports and exports. Some are built as ports and for carrying passengers. Based on all or more of the above factors, they are formed at the confluence of distant major waterways. Major ports in the world fall into this category.
(ii) Write down how countries benefit from world trade.
Answer: The world economy will benefit from global trade if each country specializes in different fields and division of labor in the production of different goods. Trade grows when every product and service is specialized. Similarly, exchange of goods, mutual understanding and cooperation are essential in international trade.
Today, trade is the basis of the world economic organizations and trade forms the basis of the foreign policy of states. Improved transport and communication systems give new directions to international trade and contribute significantly to development.
