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UPSC

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

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Q 1. 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

Capital receipts and payments do not form part of current account of Balance of Payment.

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Q 2. Which institution is known as 'soft loan window' of World Bank?

A

IFC

IDA

C

IMF

D

Indian Development Forum

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Q 3. Global capital-flows to developing countries increased significantly during the nineties. In view of the East Asian financial crisis and Iatin American experience, which type of inflow is good for the host country?

A

Commercial loans

Foreign Direct Investment

C

Foreign Portfolio Investment

D

External Commercial Borrowings

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Q 4. The earnings of India from diamond export is quite high. Which one of the following factors has contributed to it?

A

pre-independence 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

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Q 5. Which one of the following modes of privatization is the most comprehensive and complete?

A

introduction of private capital in public sector

B

contracting out management of public enterprises to the private sector

C

transferring ownership and management to the workers

transferring ownership and management to the private sector

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Q 6. Which unit of valuation is known as 'paper gold'?

A

Eurodollar

B

Petrodollar

SDR

D

GDR

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Q 7. Which of the following is not one of the features of the Special Economic Zones (SEZ) 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.

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Q 8. Which of the following is considered lending for promotion of exports?

Packing Credit

B

Overdraft

C

Cash Credit Account

D

BiII Discounting

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Q 9. For National Manufacturing and Investment Zones (NMIZ). Special Economic Zone (SEZ) and EOUs (Exports-Oriented Units), 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

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Q 10. 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 skiIIs 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.

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Q 11. A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and mature economies like UK and France. Why?

A

India has preference for certain countries as regards receiving FDI

India has double taxation avoidance agreement with Mauritius

C

Most citizens of Mauritius have ethnic identity with India and so they feel secure to invest in India

D

Impending dangers of global climatic change prompt Mauritius to make huge investments in India

Explanation

India has comprehensive Double Taxation 13. 8. Avoidance Agreements (DTAA) with 23 countries. This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two specific provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from DTAA. Section 90 is for taxpayers who have paid the tax in a country with which India has signed DTAA, while Section 91 provides relief to taxpayers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kind of taxpayers Mauritius by itself is a low tax counting.

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Q 12. TRIPS (Trade Related aspects of Intellectual Property Rights) agreements is administered by

A

United Nations Conference on Trade and Development (UNCTAD)

B

United Nations Organization (UNO)

World Trade Organization (WTO)

D

World Bank (WB)

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Q 13. Which is the role of the International Monetary Fund (IMF)?

A

To implement and advance global trade agreements

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

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Q 14. Which of the following is not an argument for protectionism?

A

To protect infant industries

To increase the level of imports

C

To protect strategic industries

D

To improve the balance of payments

Explanation

Protectionism would reduce the level of imports into an economy.

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Q 15. Dumping in the context of international trade refers to :

Exporting goods at prices below the cost of production

B

Exporting goods of inferior quality

C

Exporting goods only to re-import them at cheaper rates

D

Exporting goods without paying appropriate taxes in the receiving country

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Q 16. Foreign Direct Investment involves:

A

A speculator trying to make a profit by buying company shares on a foreign stock exchange.

A UK energy company buying territory abroad where it expects to find oil reserves.

C

A tourist purchasing foreign currency to spend on a holiday abroad.

D

A company signing an agreement with a wholesaler to distribute its products in foreign markets.

Explanation

The energy company will own and control the territory and the oil reserves it contains.

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Q 17. Many a times we read about Hot Money in newspapers. Which among the following options rightly describes hot money?

A

Hot money is useful and generally durable and is good for the country in all weathers

Hot money is dangerous and volatile and leaves the country in bad weather conditions

C

Hot money is good and adds to the development of the country & it comes from exports of services

D

Hot money is bad & useless as its arises from unusual activities like casinos, gambling, horse races, speculations etc.

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Q 18. A systematic record of all economic transactions completed between residents of a country and the rest of the world in a year is known as..?

A

Net Capital Flow

Balance of Payment

C

Balance of Trade

D

Absolute Flow

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Q 19. Asian Financial Crisis of 1997 started from which of the following countries?

A

Myanmar

Thailand

C

Cambodia

D

Malaysia

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Q 20. Many a times we read in the newspapers that when Foreign Capital is allowed to enter the country freely, it can affect the economy adversely. Which among the following is a correct reason for the above assumption?

A

It affects the balance of payments of the country by adversely affecting the Current Account

It poses risks to the value of the country's currency as well as management of local liquidity

C

The foreign capital earns profit in the country which is repatriated

D

The Balance of Trade of the country is badly affected by Foreign Capital Inflows

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Q 21. TANKAN is revision of the Industry Classification of the Short-term Economic Survey of Enterprises (usually quarterly ) is used in following country ?

Japan

B

South Korea

C

China

D

All of them

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Q 22. Which among the following is the most important source region of NRI remittances to India ?

North America

B

Europe

C

Middle East

D

Asia Pacific

E

South America

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Q 23. In context with the two way trade of India with different regions, which among the following region is India's largest trade partner?

A

EU Region

Gulf Region

C

North America

D

Latin America

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Q 24. Which among the following will be a debit entry in India's balance of payments?

A

Imports of goods by India.

Income of Indian investments abroad.

C

Receipts of transfer payments.

D

Exports of services by India.

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Q 25. Which among the following countries is currently the biggest supplier of crude oil to India?

A

Iran

Saudi Arabia

C

UAE

D

Nigeria