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7. Government policy with respect to export and import is called :
a) Fiscal policy. b) Monetary policy.
c) Finance policy. d) Commercial policy.
Answer the next three(8-10) questions from the table given below.

Labour cost of production in Hours

Portugal
England 12

8. Which of the following is true ?

a) Portugal is having absolute cost advantage in the production of cloth.
b) Portugal is having an absolute cost advantage in the production of wine.
c) England is having an absolute cost advantage in the production of cloth.

d) Portugal is having an absolute cost advantage in the production of both the commodities
wine and cloth,

9. Which of the following nation is having a comparative cost advantage in the production of wine ?

a) England. b) Portugal.
c) Both. d) None of these.
10. Which of the following nation is having a comparative cost advantage in the production of cloth ?
a) England. b) Portugal.
c) Both. d) None of these.

11. Which of the following international organization is responsible for developing and maintaining
the system of international trade rules and dealing with trade disputes ?

a) WTO. b) IMF.
c) IBRD. d) IDA.
12. Ifreceipts from foreigners (export) is equal to payments to the foreigners (imports) then there is:
a) Sectoral balance. b) Internal balance.
c) External balance. d) Capital account balance.

(12 x %= 6 marks)
Section B (Very Short Answers)
Answer any ten each question carries 2 marks.
13. What is meant by economic integration ?

14. Distinguish between international trade and interregional trade.

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