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SESSION       DEC 2023





Set – 1



  1. Discuss Contemporary Issues and Challenges of International Trade.

Ans 1.

In today’s globalized economy, international trade plays a pivotal role in shaping the economic landscape of nations. However, with its vast scope and interconnectedness, international trade also brings forth a myriad of contemporary issues and challenges that governments, businesses, and societies must grapple with. Understanding these challenges is crucial for effectively navigating the complexities of international trade and fostering sustainable economic growt

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  1. Elaborate the different types of foreign aid and provide examples of each.

Ans 2.

Foreign aid, a crucial component of international relations and development efforts, comes in various forms tailored to meet the diverse needs of recipient countries. These forms of assistance can be broadly categorized into several types, each serving distinct purposes and objectives. Let’s delve into each type, elucidating their characteristics and providing



  1. Describe the theoretical foundations of gains from trade, and how do they explain the benefits of international exchange.

Ans 3.

Trade has been a fundamental aspect of human civilization, facilitating the exchange of goods and services across borders. The theoretical foundations of gains from trade offer insights into why countries engage in international exchange and how they benefit from it.

Absolute Advantage: One of the earliest theories explaining gains from trade is the concept of absolute advantag

SET – 2


  1. Differentiate between the Balance of Payments and the Balance of Trade.

Ans 4.

Balance of Payments (BoP) and Balance of Trade (BoT) are two crucial concepts in international economics, each representing distinct aspects of a country’s economic transactions with the rest of the world. While both concepts are interrelated, they serve different purposes and provide unique insights into a nation’s economic health.

Balance of Payments (BoP) refers to a comprehensive record of all economic transactions between residents of a



  1. How do customs duties, quotas, and tariffs impact international trade relations and theglobal economy?

Ans 5.

Customs duties, quotas, and tariffs are integral components of international trade policies employed by governments worldwide. These measures are designed to regulate the flow of goods and services across borders and can have significant implications for international trade relations and the global economy.

Customs duties,



  1. Discuss the different theories of Exchange Rate Determination.

Ans 6.

Exchange rates play a crucial role in the global economy, influencing trade, investment, and financial flows between countries. Various theories have been proposed to explain the determination of exchange rates, reflecting different perspectives on how exchange rates are determined in the foreign exchange market. Here, we will discuss some of the key theories:

Purchasing Power Parity (PPP