1. Which one of the following pairs is not correctly matched?

2. Assertion (A): A change in the income terms of trade is an indicator of welfare.
Reason (R): Income terms of trade measure the quantity of imports bought by exports.

3. Assertion (A): Special Drawing Rights (SDRs) have the characteristics of an international currency.
Reason (R): SDRs were introduced to increase international liquidity

4. Assertion (A): Factor price equalisation theorem deals with the effect of trade on factor prices.
Reason (R): Trade in goods has no effect on factor prices.

5. Dumping aims at flooding a foreign country with

6. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II (Assumption) (Implication) (a) No transport costs 1. Commodity prices same in trade in the two countries (b) Perfect competition 2. Optimal allocation of in factor markets factors (c) Factor intensities 3. Techniques of producdiffer between tion same in the two goods goods (d) Production functions 4. Techniques of producsame in both tion same in the two countries countries Codes: (a) (b) (c) (d)

7. Which one of the following represents capital account convertibility of a currency?

8. The tariff which maximises a country's economic welfare is called

9. Consider the following statements: Devaluation results in a
1. rise in the domestic price of imports
2. rise in the domestic price of exports
3. rise in the domestic price of exports and imports
4. fall in the foreign price of exports Which of the above statements are correct?

10. An Optimum tariff

11. Which one of the following pairs is correctly matched?

12. Over-valuation of currency is NOT desirable, when

13. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II (a) Buying and selling of 1. Pegging Operation home currency in the foreign exchange market by government or its authorised agency (b) Charging different prices 2. Dumping Operation in different markets for an internationally traded commodity (c) The price of imports 3. Free on board (f.o.b.) paid by local purchasers, which is more than their normal value (d) Local producers of an 4. Cost, insurance and export good receiving freight (c.i.f.) only the price of the good as it leaves the country. Codes: (a) (b) (c) (d)

14. Assertion (A) : Free international trade necessarily lowers the real wage of the scarce factor of production in terms of any good.
Reason (R) : If the real wage declines in terms of every good, real income must suffer regardless of the tastes and expenditure patterns of the labourers as consumers.

15. Which of the following items were responsible for most of the increase in international liquidity since World War-II?

1. Gold
2. Dollars
3. Other Convertible Currencies
4. SDRs
Select the correct answer using the codes given below:

16. Consider the following statements: Under the gold-standard inflow of gold from the deficit to the surplus nation results in
1. a fall in the interest rate in the surplus nation.
2. a fall in the interest rate in the deficit nation.
3. an outflow of capital from surplus to deficit nation.
4. an outflow of capital from deficit to surplus nation. Of the above statements:

17. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II (a) Supply side of 1. David Ricardo International Trade (b) Demand side of 2. Bastable and International Trade Alfred Marshall (c) Opportunity cost of 3. G. Haberler International Trade (d) Real cost theory 4. Alfred Marshall of International Trade and Edgeworth Codes: (a) (b) (c) (d)

18. Consider the following statements : Foreign Portfolio Investment in India means.
1. investment by a foreign firm to start a subsidiary.
2. investment by a foreign firm to take over an existing firm
3. foreign investment in shares.
4. foreign investment in bonds. Which of the above statements are correct?

19. The flexible exchange rate has a number of advantages. Which one of the following is not to be considered as such an advantage?

20. Match List-I with List-II and select the correct answer using the codes given below the lists
List-I List-II (a) Hamilton-List 1. Trade creation and Trade diversion effects (b) Marshall-Lerner 2. Infant-Industry argument (c) F.Y. Edgeworth 3. Elasticity approach (d) Jacob Viner 4. Impoverishing growth Codes: (a) (b) (c) (d)

21. The Ricardian theory of comparative advantage relates to

22. Assertion (A): Heckscher-Ohlin theory invalidates the classical theory of comparative costs.
Reason (R): Heckscher-Ohlin theory goes behind the comparative cost theory.

23. The country is likely to be better off after export-ledgrowth provided that

24. Which one of the following pairs is not correctly matched.

25. In a three-country two-commodity model, countries being of unequal sizes, the domestie exchange ratio are as under: Country Domestic Exchange Ratio
1 2a : 1b
2 1a : 1b
3 1a : 2b As per this model, the stability in international trade is most likely at the international terms of trade of