Class 12 International Trade (Fundamentals of Human Geography) Mock Test (CBSE)

Topics in International Trade (Fundamentals of Human Geography)

• History of international trade
• Basis of international trade
• Important aspects of international trade
• Balance of trade
• Types of international trade
• Case for free trade
• World Trade Organisation
• Regional trade blocs
• Gateways of international trade: ports

International Trade (Fundamentals of Human Geography) practice questions with answers

1. Q1Multiple choice·1 mark
   International trade is generally classified into which of the following two primary types based on the number of trading partners?

   1. (a)Retail and wholesale trade
   2. (b)Bilateral and multilateral trade
   3. (c)Primary and secondary trade
   4. (d)Export and import trade
   Show answer and step marks

   1. Correct option: (b) Bilateral and multilateral trade+1

   Answer: (b)
2. Q2Multiple choice·1 mark
   Which of the following situations correctly describes an unfavorable balance of trade for a country?

   1. (a)Total value of exports is greater than the total value of imports
   2. (b)The country trades with only one nation
   3. (c)Total value of imports is greater than the total value of exports
   4. (d)Total value of exports is equal to the total value of imports
   Show answer and step marks

   1. Correct option: (c) Total value of imports is greater than the total value of exports+1

   Answer: (c)
3. Q3Short answer·2 marks
   State any two main arguments in favor of free trade in international trade.
   Show answer and step marks

   1. First argument, any one of: it encourages international specialisation and efficient use of resources, as countries produce what they have a comparative advantage in; consumers get a wider variety of goods and services at lower prices; competition from imports makes domestic producers more efficient and improves quality; exporters gain access to larger markets and economies of scale; it brings in technology and investment and speeds up economic growth; or any other valid argument.+1
   2. Second argument, a different one from the same list.+1

   Answer: Any two of: specialisation and efficient use of resources through comparative advantage; wider choice of goods at lower prices for consumers; competition improves efficiency and quality; larger markets and economies of scale for exporters; inflow of technology and investment.
4. Q4Short answer·3 marks
   Explain the concept of regional trade blocs. Name any two major regional trade blocs and state their primary objective.
   Show answer and step marks

   1. Explanation: regional trade blocs are groups of countries, usually close to each other and with similar or complementary trade items, that sign trade agreements to encourage trade among themselves and to curb restrictions on the trade of developing countries; they arose because global organisations failed to speed up intra-regional trade.+1
   2. First bloc named, any one of: European Union (EU); ASEAN; SAFTA; NAFTA (now USMCA); OPEC; CIS; LAIA; or any other valid regional trade bloc (e.g. MERCOSUR).+0.5
   3. Objective of the first bloc: EU — a single market with a single currency; ASEAN — accelerating economic growth, cultural development, peace and regional stability; SAFTA — reducing tariffs on intra-regional trade; NAFTA/USMCA — free trade by removing tariffs among the USA, Canada and Mexico; OPEC — coordinating and unifying petroleum policies; CIS — cooperation on economics, defence and foreign policy; LAIA — promoting regional trade among Latin American countries; MERCOSUR — a common market among South American countries; or the correct objective of any other valid bloc named.+0.5
   4. Second bloc named, a different one from the same list.+0.5
   5. Objective of the second bloc, as described above.+0.5

   Answer: Regional trade blocs are groups of nearby countries with similar or complementary trade items that make trade agreements to encourage trade among themselves and curb restrictions on developing countries' trade. Any two of: EU (single market with single currency); ASEAN (economic growth, cultural development, peace and regional stability); SAFTA (reducing tariffs on intra-regional trade); NAFTA/USMCA (free trade among the USA, Canada and Mexico); OPEC (coordinating petroleum policies); CIS (cooperation on economics, defence and foreign policy).
5. Q5Short answer·3 marks
   Explain any three major functions of the World Trade Organisation (WTO) in facilitating international trade.
   Show answer and step marks

   1. First function explained, any one of: sets the rules for the global trading system; promotes free trade by negotiating cuts in tariff and non-tariff barriers among member countries; settles trade disputes between member nations through its dispute settlement body; covers trade in services (e.g. telecommunication, banking) and intellectual property rights; monitors and reviews national trade policies; cooperates with the IMF and World Bank for coherent global economic policy; or any other valid function.+1
   2. Second function explained, a different one from the same list.+1
   3. Third function explained, a different one from the first two.+1

   Answer: Any three of: sets the rules for the global trading system; promotes free trade by reducing tariff and non-tariff barriers; settles trade disputes between members; covers trade in services and intellectual property rights; monitors national trade policies; cooperates with the IMF and World Bank.

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