Question

3. Factors that influence international trade

World trade has grown substantially in the last 60 years. For example, while world output grew at an annual rate of 3.8% per year between 1950 and 2003, world exports grew at 10.8% per year over the same time period.

Which of the following help to explain the increase in international trade and finance since the 1950s? Check all that apply.

a.Better high-speed rail lines

b.International trade agreements that lower tariffs and import quotas

c.The widespread use of the Internet to conduct business

d.Changes in exchange rates

Answer 1

Since 1950s, increase in international trade and finance has been due to the following reasons -

1. Advent of speedier means of transportation in terms of high speed rail lines etc. enables the faster delivery of goods and that contributes in expansion of trade.

2. International trade agreements that lower tariffs and import quotas also facilitated in increase in trade between countries.

3. Greater use of internet enables buyers and sellers to connect to each other even if they are at significant distance from each other. This also contricuted towards the expansion of trade.

Hence, the correct answer is the option (a), (b), and (c).