Economics

Define
1. BUSINESS ENVIRONMENT:
Business environment refers to those aspects of the surroundings business enterprise,
which affect or influence its operations and determine its effectiveness.

2. NECESSITIES OF BUSINESS ENVIRONMENT:

A business can be established, but to successfully sustain a business, the business

needs resources like finance, for which it has to depend on financial institutions.
Acceptance of social norms, for which it has to depend on society. Proper market
conditions, for which it has to depend on the market. The sale of products/services,
for which it has to depend on the customers. The labour, for which it has to depend
on society.

3. Terms of trades:
The relative price of export in terms of import is defined as the ratio of export
prices
As for import prices, It is the amount of imported goods an economy can purchase
per unit of export goods.
The various TOT are as follows:
1. Commodity tot
2. Income tot
3. Single factoral tot
4. Double factoral tot.

4. Balance of payment:

The difference of exports and imports is known as balance of payments. (BOP)

It can take 3 situations, which are as follows:

A) X-M= Positive
 B) X-M= Negative

C) X-M= Zero

5. Where was the first international conference held

Answer: It was held on May 25 to 27, 1994 in Geneva, Switzerland. First
International Conference on the World-Wide Web.

Section B

Q. 1 What are the different types of international trade theories?

Answer: The international trade (IT) is the exchange of goods and services across
the national boundaries by two or more countries for their mutual benefits,
requirements.
When one country has surplus of a commodity but require other due to shortage, costly
local production, non-availability of resources to produce, goes for exchange of its
surplus with other country who has the other commodity in the same condition.
There are 7 types of IT theories, namely:
1. Mercantilism theory,
2. Absolute advantage theory,
3. Comparative advantage theory,
4. Heckscher-Ohlin theory,
5. PLC theory,
6. Global strategic rivalry theory,
7. National competitive advantage theory.

Q.2 what are tarrif & non-tarrif barriers?

Answer: TARIFF BARRIER:
 The tax on certain imports as per defined criteria is called tariff.
  Such tariffs increase the prices of imported goods, making imports to be
curtailed or reduced.
 Hence the tariff here acts as a barrier.

NON-TARIFF BARRIER:
The rules, regulations, restrictions regarding quantity, price, volume of supply etc.
imposed on imports are the non-tariff barrier.