6 Most VSAQ’s of Foreign Sector Chapter in Inter 2nd Year Commerce (TS/AP)

2 Marks

VSAQ-1 : FDI (OR) Foreign Direct Investment. (OR) Write about FDI.

Foreign Direct Investment (FDI) signifies the investment made by entities from one country into assets or ventures located in another country. It involves the transfer of capital, skills, and technology and is instrumental in bolstering economic growth, stimulating international cooperation, and augmenting domestic savings and investment. Furthermore, FDI often leads to the infusion of advanced technology, elevating production efficiency and driving economic development.

VSAQ-2 : Balance of Trade. (OR) Balance of Trade – (163).

Balance of Trade (BOT) is the numerical expression of the disparity between a nation’s exports and imports. A surplus materializes when exports outstrip imports, whereas a deficit arises when imports surpass exports. The BOT serves as a barometer of economic well-being and trade competitiveness.

VSAQ-3 : WTO objectives.

The World Trade Organization (WTO) strives to enhance living standards, income, employment, and efficient resource allocation on a global scale. Additionally, it seeks to foster sustainable development by harmonizing economic growth with environmental considerations.

VSAQ-4 : Dunkel Proposals.

The Dunkel Proposals, developed by Arthur Dunkel, played a pivotal role in concluding the Uruguay Round’s Final Act on December 15, 1993. These proposals encompassed a wide range of topics, including tariff and non-tariff measures, textiles, agriculture, and subsidies, laying the groundwork for the formation of the World Trade Organization (WTO).

VSAQ-5 : Balance of Payments. (OR) Define Balance of payments. (OR) Write about the Balance of Payments.

The balance of payments is a comprehensive accounting record, akin to a financial balance sheet, that systematically documents all economic transactions occurring between a reporting country and the rest of the world during a defined period. As per the International Monetary Fund’s (IMF) official definition, it encompasses all financial and economic dealings conducted by residents of the reporting country with foreign entities.

VSAQ-6 : GATT objectives (OR) What are the objectives of GATT?

The objectives of GATT (General Agreement on Tariffs and Trade) can be summarized as follows:

  1. Unconditional Most Favoured Nations (MFN) Principle: GATT members are committed to treating all other member countries equally, without discrimination. Any trade concession granted to one member must be extended to all members.
  2. Protection of Domestic Industry Through Tariffs: GATT encourages the use of tariffs as a means of protecting domestic industries. This means that countries can impose tariffs on imports to shield their domestic industries.
  3. Trade Based on Non-Discrimination, Reciprocity, and Transparency: GATT promotes trade based on the principles of non-discrimination, reciprocity (equal treatment), and transparency (openness and clarity in trade policies and practices).
  4. Liberalization of Tariffs and Non-Tariff Measures: GATT aims to reduce and eliminate tariffs and non-tariff barriers to trade through multilateral negotiations. It seeks to create a more open and competitive global trading system.