Plus Two / 12th Economics - Book Back Answers - Chapter 7 - English Medium
Chapter 7: International Economics
Tamil Nadu Board 12th Standard Economics - Chapter 7: Book Back Answers and Solutions
This post covers the book back answers and solutions for Chapter 7 from the Tamil Nadu State Board 12th Standard Economics textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.
We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.
By going through this material, you’ll gain a strong understanding of Chapter 7 along with the corresponding book back questions and answers (PDF format).
Question Types Covered:
- 1 Mark Questions: Choose the correct answer, Fill in the blanks, Identify the correct statement, Match the following
- 2 Mark Questions: Answer briefly
- 3, 4, and 5 Mark Questions: Answer in detail
All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.
All the best, Class 12 students! Prepare well and aim for top scores. Thank you!
Chapter 7: International Economics
I. Choose the correct answer.
1. Trade between two countries is known as_____________trade
a) External
b) Internal
c) Inter-regional
d) Home
Answer Key:
a) External
2. Which of the following factors influence trade?
a) The stage of development of a product
b) The relative price of factors of productions.
c) Government.
d) All of the above.
Answer Key:
d) All of the above.
3. International trade differs from domestic trade because of
a) Trade restrictions
b) Immobility of factors
c) Different government policies
d) All the above
Answer Key:
d) All the above
4. In general, a primary reason why nations conduct international trade is because
a) Some nations prefer to produce one thing while others produce another
b) Resources are not equally distributed among all trading nations
c) Trade enhances opportunities to accumulate profits
d) Interest rates are not identical in all trading nations
Answer Key:
b) Resources are not equally distributed among all trading nations
5. Which of the following is a modern theory of international trade?
a) absolute cost
b) comparative cost
c) Factor endowment theory
d) none of these
Answer Key:
c) Factor endowment theory
6. Exchange rates are determined in
a) money market
b) foreign exchange market
c) stock market
d) capital market
Answer Key:
b) foreign exchange market
7. Exchange rate for currencies is determined by supply and demand under the system of
a) Fixed exchange rate
b) Flexible exchange rate
c) Constant exchange rate
d) Government regulated exchange rate
Answer Key:
b) Flexible exchange rate
8. Net export equals _______
a) Export x Import
b) Export + Import
c) Export – Import
d) Exports of services only
Answer Key:
c) Export – Import
9. Who among the following enunciated the concept of single factoral terms of trade?
a) Jacob Viner
b) G.S.Donens
c) Taussig
d) J.S.Mill
Answer Key:
a) Jacob Viner
10. Terms of Trade of a country show _________
a) Ratio of goods exported and imported
b) Ratio of import duties
c) Ratio of prices of exports and imports
d) Both (a) and (c)
Answer Key:
c) Ratio of prices of exports and imports
11. Favourable trade means value of exports are _______than that of imports.
a) More
b) Less
c) More or Less
d) Not more than
Answer Key:
a) More
12. If there is an imbalance in the trade balance (more imports than exports), it can be reduced by
a) decreasing customs duties
b) increasing export duties
c) stimulating exports
d) stimulating imports
Answer Key:
b) increasing export duties
13. BOP includes
a) visible items only
b) invisible items only
c) both visible and invisible items
d) merchandise trade only
Answer Key:
c) both visible and invisible items
14. Components of balance of payments of a country include
a) Current account
b) Official account
c) Capital account
d) All of above
Answer Key:
d) All of above
15. In the case of BOT,
a) Transactions of goods are recorded.
b) Transactions of both goods and services are recorded.
c) Both capital and financial accounts are included.
d) All of these
Answer Key:
a) Transactions of goods are recorded.
16. Tourism and travel are classified in which of balance of payments accounts?
a) merchandise trade account
b) services account
c) unilateral transfers account
d) capital account
Answer Key:
b) services account
17. Cyclical disequilibrium in BOP occurs because of
a) Different paths of business cycle.
b) The income elasticity of demand or price elasticity of demand is different.
c) long-run changes in an economy
d) Both (a) and (b).
Answer Key:
d) Both (a) and (b).
18. Which of the following is not an example of foreign direct investment?
a) the construction of a new auto assembly plant overseas
b) the acquisition of an existing steel mill overseas
c) the purchase of bonds or stock issued by a textile company overseas
d) the creation of a wholly owned business firm overseas
Answer Key:
c) the purchase of bonds or stock issued by a textile company overseas
19. Foreign direct investments not permitted in India
a) Banking
b) Automic energy
c) Pharmaceutical
d)Insurance
Answer Key:
b) Automic energy
20. Benefits of FDI include, theoretically
a) Boost in Economic Growth
b) Increase in the import and export of goods and services
c) Increased employment and skill levels
d) All of these
Answer Key:
d) All of these
a) External
b) Internal
c) Inter-regional
d) Home
Answer Key:
a) External
2. Which of the following factors influence trade?
a) The stage of development of a product
b) The relative price of factors of productions.
c) Government.
d) All of the above.
Answer Key:
d) All of the above.
3. International trade differs from domestic trade because of
a) Trade restrictions
b) Immobility of factors
c) Different government policies
d) All the above
Answer Key:
d) All the above
4. In general, a primary reason why nations conduct international trade is because
a) Some nations prefer to produce one thing while others produce another
b) Resources are not equally distributed among all trading nations
c) Trade enhances opportunities to accumulate profits
d) Interest rates are not identical in all trading nations
Answer Key:
b) Resources are not equally distributed among all trading nations
5. Which of the following is a modern theory of international trade?
a) absolute cost
b) comparative cost
c) Factor endowment theory
d) none of these
Answer Key:
c) Factor endowment theory
6. Exchange rates are determined in
a) money market
b) foreign exchange market
c) stock market
d) capital market
Answer Key:
b) foreign exchange market
7. Exchange rate for currencies is determined by supply and demand under the system of
a) Fixed exchange rate
b) Flexible exchange rate
c) Constant exchange rate
d) Government regulated exchange rate
Answer Key:
b) Flexible exchange rate
8. Net export equals _______
a) Export x Import
b) Export + Import
c) Export – Import
d) Exports of services only
Answer Key:
c) Export – Import
9. Who among the following enunciated the concept of single factoral terms of trade?
a) Jacob Viner
b) G.S.Donens
c) Taussig
d) J.S.Mill
Answer Key:
a) Jacob Viner
10. Terms of Trade of a country show _________
a) Ratio of goods exported and imported
b) Ratio of import duties
c) Ratio of prices of exports and imports
d) Both (a) and (c)
Answer Key:
c) Ratio of prices of exports and imports
11. Favourable trade means value of exports are _______than that of imports.
a) More
b) Less
c) More or Less
d) Not more than
Answer Key:
a) More
12. If there is an imbalance in the trade balance (more imports than exports), it can be reduced by
a) decreasing customs duties
b) increasing export duties
c) stimulating exports
d) stimulating imports
Answer Key:
b) increasing export duties
13. BOP includes
a) visible items only
b) invisible items only
c) both visible and invisible items
d) merchandise trade only
Answer Key:
c) both visible and invisible items
14. Components of balance of payments of a country include
a) Current account
b) Official account
c) Capital account
d) All of above
Answer Key:
d) All of above
15. In the case of BOT,
a) Transactions of goods are recorded.
b) Transactions of both goods and services are recorded.
c) Both capital and financial accounts are included.
d) All of these
Answer Key:
a) Transactions of goods are recorded.
16. Tourism and travel are classified in which of balance of payments accounts?
a) merchandise trade account
b) services account
c) unilateral transfers account
d) capital account
Answer Key:
b) services account
17. Cyclical disequilibrium in BOP occurs because of
a) Different paths of business cycle.
b) The income elasticity of demand or price elasticity of demand is different.
c) long-run changes in an economy
d) Both (a) and (b).
Answer Key:
d) Both (a) and (b).
18. Which of the following is not an example of foreign direct investment?
a) the construction of a new auto assembly plant overseas
b) the acquisition of an existing steel mill overseas
c) the purchase of bonds or stock issued by a textile company overseas
d) the creation of a wholly owned business firm overseas
Answer Key:
c) the purchase of bonds or stock issued by a textile company overseas
19. Foreign direct investments not permitted in India
a) Banking
b) Automic energy
c) Pharmaceutical
d)Insurance
Answer Key:
b) Automic energy
20. Benefits of FDI include, theoretically
a) Boost in Economic Growth
b) Increase in the import and export of goods and services
c) Increased employment and skill levels
d) All of these
Answer Key:
d) All of these
II.Answer the following questions.
12th Economics (soon)
III. Answer the following questions.
12th Economics (Soon)
IV. Answer the following questions.
12th Economics (Soon)
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