Foreign Trade — Important Questions

Difference in factor endowments, Cost of production differences, Technological progress variations

International trade occurs due to differences in factor endowments, production costs, and technological capabilities between countries. Same climate conditions would reduce the need for trade.

Asia (59%), Europe (16%)

Asia had the highest share at 59% followed by Europe at 16% in India's merchandise imports in 2014-15. Other regions had smaller shares.

Price of foreign currency in domestic currency

Exchange rate is the price of a foreign currency expressed in terms of domestic currency - i.e., how many units of home currency are needed to buy one unit of foreign currency.

True

International trade involves transporting goods across national borders over longer distances, resulting in higher transport costs compared to domestic trade within a country.