Economics Chapter 8: Understanding Trade

Play an AI-generated podcast conversation about this lesson

What is the primary purpose of international trade?

To obtain commodities that cannot be produced or can be purchased at a lower price elsewhere (correct)

To enhance the barter system

To promote domestic production

To restrict the exchange of goods and services among countries

What is the characteristic of trade that makes it mutually beneficial?

One party sells and the other purchases

It involves the exchange of goods and services

It is based on the voluntary exchange of goods and services (correct)

It is conducted at two levels: international and national

What is the primary limitation of the barter system?

It is only practiced in primitive societies

It promotes domestic production

It requires a double coincidence of wants (correct)

It is a form of international trade

What is the significance of Jon Beel Mela in the context of trade?

It is possibly the only fair in India where the barter system is still alive Signup and view all the answers

What led to the overcoming of the difficulties of the barter system?

The introduction of money Signup and view all the answers

What is the relationship between trade and the number of parties involved?

Trade requires exactly two parties Signup and view all the answers

What was the primary reason for salt becoming a mode of payment in ancient times?

It was a rare and expensive commodity Signup and view all the answers

What led to the growth of European commerce during the twelfth and thirteenth century?

The development of ocean-going warships Signup and view all the answers

What was the primary purpose of the slave trade during European colonialism?

To acquire labor for plantations Signup and view all the answers

What was the impact of the Industrial Revolution on international trade?

It increased the demand for raw materials and decreased their monetary value Signup and view all the answers

What was the primary goal of the General Agreement for Tariffs and Trade (GATT)?

To reduce tariff barriers Signup and view all the answers

What is the principle that international trade is based on?

Comparative advantage Signup and view all the answers

What was the primary reason for the growth of international trade in modern times?

The development of well-developed transportation and communication systems Signup and view all the answers

What was the primary characteristic of the Silk Route?

It was a long-distance trade route connecting Rome to China Signup and view all the answers

What was the result of the disintegration of the Roman Empire on international trade?

It led to a decline in trade between Europe and Asia Signup and view all the answers

What was the primary purpose of the advertisement shown in Figure 8.2?

To advertise slave auctions Signup and view all the answers

Which of the following factors contributes to the spatial expansion of trade?

Development of efficient means of transport Signup and view all the answers

What is the result of a negative balance of trade?

Decreased financial reserves Signup and view all the answers

Which type of trade involves an agreement between two countries to trade specified commodities?

Bilateral trade Signup and view all the answers

What is the primary factor that determines the type of flora and fauna that can survive in a given region?

Climate Signup and view all the answers

What is the outcome when the value of a country's exports is more than the value of its imports?

Favourable balance of trade Signup and view all the answers

Which of the following is a consequence of a large volume of internal trade in densely populated countries?

Little external trade Signup and view all the answers

What determines the mineral resource base of a country?

Geological structure Signup and view all the answers

Why do industrialised nations export machinery and finished products and import food grains and other raw materials?

To create markets for their finished products Signup and view all the answers

What is the impact of foreign investment on trade in developing countries?

It boosts trade Signup and view all the answers

Which of the following is a characteristic of a country with a low standard of living?

Low demand for imported goods Signup and view all the answers

Which type of port is characterized by its strategic importance and serves warships?

Naval Port Signup and view all the answers

Which port is an example of an entrepot for the Baltic region?

Copenhagen Signup and view all the answers

What is the primary function of entrepot ports?

To collect goods from different countries for export Signup and view all the answers

Which of the following ports is paired with Calais across the English Channel?

Dover Signup and view all the answers

What is the primary benefit of forming trading blocs?

To reduce trade restrictions and boost economic growth Signup and view all the answers

Which of the following is NOT a type of port mentioned in the passage?

Agricultural Port Signup and view all the answers

What is the primary objective of trade liberalisation?

To bring down trade barriers and promote free trade Signup and view all the answers

What is the term for the practice of selling a commodity in two countries at a price that differs for reasons not related to costs?

Dumping Signup and view all the answers

What is the primary function of the World Trade Organisation?

To set the rules for the global trading system and resolve disputes Signup and view all the answers

What is the criticism of the World Trade Organisation by some?

It widens the gulf between rich and poor countries Signup and view all the answers

What is the purpose of Regional Trade Blocs?

To promote trade between countries with geographical proximity Signup and view all the answers

What is the benefit of undertaking international trade?

It leads to regional specialisation and higher level of production Signup and view all the answers

What is the term for granting a special status to some trading partners?

Most Favoured Nation Signup and view all the answers

What is the primary concern of developing countries in international trade?

Not getting equal playing field Signup and view all the answers

What is the result of the development of transport and communication systems?

Goods and services can travel faster and farther than ever before Signup and view all the answers

What is the percentage of world trade generated by regional trade blocs?

52 per cent Signup and view all the answers

What is a major consequence of countries competing to trade more?

Faster depletion of natural resources Signup and view all the answers

What is the primary function of port authorities?

To maintain navigable channels and provide labour services Signup and view all the answers

What type of port is San Francisco classified as?

Land-locked Harbour Signup and view all the answers

Which type of port is linked to the sea through a river or canal?

Inland Port Signup and view all the answers

What is the primary characteristic of a Comprehensive Port?

Handling both bulk and general cargo in large volumes Signup and view all the answers

What is the purpose of an Out Port?

To receive ships that are unable to approach the parent port Signup and view all the answers

What is the main difference between tanker ports and refinery ports?

Tanker ports ship oil, while refinery ports process oil Signup and view all the answers

What is the primary function of a Packet Station?

To transport passengers and mail across short distances Signup and view all the answers

What is a result of multinational corporations prioritizing profit over sustainability?

Serious implications for the future Signup and view all the answers

What is the significance of the quantity of cargo handled by a port?

It reflects the level of development of its hinterland Signup and view all the answers