# IBPS

Explore popular questions from Foreign Trade for IBPS. This collection covers Foreign Trade previous year IBPS questions hand picked by experienced teachers.

## Hindi Language

Correct Marks 4

Incorrectly Marks -1

Q 1. Christine Lagarde is the head of which among the following international agencies / bodies?

A

Asian Development Bank

B

Non-alignment Movement

C

International Atomic Energy Agency

International Monetary Fund

Correct Marks 4

Incorrectly Marks -1

Q 2. Which one of the following types of borrowings from the {tex} \mathrm {IMF}{/tex} has the softest servicing conditions?

A

Second tranche loan

B

SAF

ESAF

D

Oil facility

Correct Marks 4

Incorrectly Marks -1

Q 3. Which statement is correct regarding balance of payment crises?
I. If international reserves of a country are not enough to balance a combined deficit in current and capital account on a sustained basis, then the phenomenonn is called a BoP crisis.
II. It can be tackled by exporting more or by limiting imports through tariffs, quotas, etc. Contractionary fiscal and monetary policies can also tackle the crisis through lower import demand with fall in average income levels.
III. Another short term solution is currency devaluation which encourages exports and discourages costlier imports.

A

Both I & II

B

Only I

C

II & III

All the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 4. Choose the correct sentence regarding the trade policy:
I. Mahalanobis strategy adopted during the First plan
II. Export increased at an average rate of 29 per cent per annum in dollar terms between 1986 and 1990
III. A combination of factors such as bad policy, weak government and external factors led to the decline of this performance to nine per cent in {tex} 1990 - 91 {/tex} and 4 per cent in the subsequent years.

Only III

B

I & II

C

II & III

D

All the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 5. Foreign Direct Investments are preferred over Capital Inflow. In this context, please consider the following.
1. FDI brings in latest technology
2. FDI does not involve large outflow
3. FDI improves working efficiency
Which is/are most suitable reason/reasons for the given statement?

A

1 only

B

1 and 3

C

1 and 2

All 1, 2 and 3

Correct Marks 4

Incorrectly Marks -1

Q 6. Which statement is correct regarding FDI?
I. The success of foreign exchange management by RBI can be seen in the fact that from US$5.8 billion in March 1991 (enough to meet the import requirements for three weeks) the country's reserves have grown to around US {tex} \$ 352 {/tex} billion by December 2015.
II. It is pertinent to note here that some of the increase in the reserve is attributed to the weakness of the dollar in the post-Iraq war scenario.

A

Only I

B

Only II

Both I & II

D

None of these

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 7. Which sentences are correct regarding special drawing rights?
I. It was created in 1980
II. It is also known as "paper gold".
III. Its value is based on a basket of five key international key currencies and SDRs can be exchanged for freely usable currencies

A

Only II

B

I & III

II & III

D

All the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 8. Which of the below statements are correct regarding exchange trade?
I. The value of rupee was managed by the state bank
II. The strict foreign exchange controls also encouraged hawala trade
III. India followed a strongly inward looking policy, laying stress on import substitution

A

Only I

Both II & III

C

Only III

D

All the above

Correct Marks 4

Incorrectly Marks -1

Q 9. The earnings of India from diamond export is quite high. Which one of the following factors has contributed to it?

A

pre-independene stock-piling of diamonds in the country which are now exported

B

large production of industrial diamonds in the country

expertise available for cutting and polishing of imported diamonds which are then exported

D

as in the past, India produces huge quantity of gem diamonds which are exported

Correct Marks 4

Incorrectly Marks -1

Q 10. What are the facts regarding structural change in India's export since {tex} 1991 ? {/tex}
I. There are indications that during {tex} 1990 \mathrm { s } {/tex}, some of Indian exports have moved upwards in value addition chain whereby instead of exporting raw materials, the country has switched over to export of processed goods.
II. There were significant compositional shift within the major manufactured product groups such as engineering goods, chemicals and allied products, etc.

A

Only II

B

Only I

Both I & II

D

None of the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 11. For National Manufacturing and Investment Zones ({tex} \mathrm{NMIZ}{/tex}), Special Economic Zone ({tex} \mathrm{SEZ}{/tex}) and EOUS ({tex} \mathrm{Exports-Oriented \,Units}{/tex}), which of the following statement is true?

A

NMIZs and EOUs will be located within SEZs

SEZs and EOUs will be located within NMIZs.

C

NMIZs are independent of SEZs and EOUs.

D

NMIZs and SEZs will be competitors in nature

Correct Marks 4

Incorrectly Marks -1

Q 12. AoA in context with World Trade Organization is_____?

A

Article of Association

Agreement on Agriculture

C

Agreement on Association

D

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 13. Consider the following statements:
1. The Petrapole-Benapole border checkpoint controls the foreign trade between India and Bangladesh.
2. Petrapole is on Bangladesh side and Benapole is on Indian side.
Which of the statements given above is/are correct?

1 only

B

2 only

C

1 and 2

D

None

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 14. Which of the below statements are correct?
I. Reverse account balance makes an adjustment between current account balance and capital account balance.
II. If surplus in the Capital Account is more than deficit in the Current Account, there is net increase in the Forex Reserves of the country at the end of the year.
III. If deficit in the current account is more than surplus in the Capital Account then there is net decrease in Foreign Reserves of the country at the end of the year.

A

I & II

B

I & III

C

Only II

All the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 15. Which of the following is considered lending for promotion of exports?

Packing Credit

B

Overdraft

C

Cash Credit Account

D

Bill Discounting

Correct Marks 4

Incorrectly Marks -1

Q 16. Which of the following is not one of the features of the Special Economic Zones ({tex} \mathrm {SEZ}{/tex}) being set up for promoting exports?

A

The SEZ area will be treated as foreign territory for trade operations, duties and tariff.

B

No licence is required for import into the zone.

Foreign workers will be allowed free entry without visa restrictions.

D

There will be no routine examination by customs authorities of import/export cargo.

Correct Marks 4

Incorrectly Marks -1

Q 17. Are the statements given below the subset of the third category of FDI?
I. It consists of sectors where automatic approval is granted for FDI (often foreign equity participation less than 100 per cent)
II. It consists of sectors where prior approval from the Foreign Investment Approval Board (FIPB) is required

A

Only I

B

Only II

Both I & II

D

None of these

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 18. Which of the following does not form part of current account of Balance of Payments?

A

Export and import of goods

B

Export and import of services

C

Income receipts and payments

Capital receipts and payments

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 19. The New Economic Policy ( 1991 ) was launched in the background of the following economic indicators:
1. India's foreign exchange reserves had fallen to {tex} \mathrm {US\\$1 }{/tex} billion.
2. The fall of the Soviet Union had deprived India of almost a quarter of its export market.
3. There was negative growth in real {tex}\mathrm{GDP}{/tex}.
4. Indian rupee had to be devalued by {tex}45{/tex} per cent.

A

1, 2, 3 and 4

B

1 only

1 and 2

D

1, 2 and 3

Correct Marks 4

Incorrectly Marks -1

Q 20. Which statement is correct regarding Current account?
I. Those transactions arising out of exports and imports (the visible items)
II. It is a statistical statement of all transactions made between one particular country and all other countries during a specified period of time
III. This account is the summary of all international trade transctions of the domestic country in one year

A

{tex} \mathrm { I \,} \& \mathrm { \,II } {/tex}

B

Only {tex}\mathrm{I}{/tex}

C

{tex}\mathrm {II}\ {/tex} & {tex}\mathrm{III}{/tex}

Only {tex}\mathrm{III}{/tex}

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 21. Which is the role of the International Monetary Fund {tex} ( \mathrm { IMF } ) ? {/tex}

A

B

To settle industrial and trade disputes between members

C

To help poorer countries with their economic development

To maintain international financial stability in global financial markets

Correct Marks 4

Incorrectly Marks -1

Q 22. Which of the following organisation provides guarantee to exporters?

A

EXIM Bank

Export Loan Guarantee Corporation

C

RBI

D

Commerce Ministry

Correct Marks 4

Incorrectly Marks -1

Q 23. Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?

A

FII helps bring better management skills and technology, while FDI only brings in capital.

FII helps in increasing capital availability in general, while FDI only targets specific sectors.

C

FDI flows only into the secondary market while FII targets primary market

D

FII is considered to be more stable than FDI.

Correct Marks 4

Incorrectly Marks -1

Q 24. What are the factors on which import substitution strategy was based on?
I. Non-price
II. Physical- interventionist policies like licensing, quotas and other physical restrictions on imports

A

only II

B

Only I

Both I & II

D

None of the above

##### Explanation

Correct Marks 4

Incorrectly Marks -1

Q 25. Consider the following statements:
I. These zones were created to develop such an environment in the economy which may provide capability of facing international competition.
II. The Export Processing Zone (EPZs) set up as enclaves, separated from the Domestic Tariff Area by fiscal barriers, were intended to provide a competitive duty free environment for export production
III. There are total 10 EPZs in our country
Which statement is/are correct regarding export processing zone

A

Only III

I & II

C

II & III

D

All the above