Domestic inflation erodes the price competitiveness of a country's exports and makes imports relatively cheaper, leading to a worsening balance of trade.
Inflationary pressure in the domestic market
Asked in WBCS Main Paper 5 2021 · Topic: Trade Balance and Trade Deficit/Surplus (Implications of Trade Deficit/Surplus on Economic Growth, Employment, and Inflation)
Show answer
Answer: A. makes balance of trade unfavourable.
More External Sector of Economy questions
- The trade between two countries can be useful if cost ratios of goods are _____.
- Import of a country in 2022 was ₹ 7200 cr. and export was ₹ 6000 cr. In 2023, these are increased by 5% but in 2024 the figures are decreased by 5%. The ratio of amount of import to Export in 2024 is - (1) 7205 : 6005 (3) 7182 : 5985 (5) Question not attempted
- The difference of the Government Minimum Support Price (MSP) and market price, which is paid directly to the farmers under W.T.O. is called
- Amber Box is related to which of the following?
- The WTO basically promotes
- The World Trade Organization (WTO) formally approved which country's membership in December, 2015?
- India has signed a tripartite MoU with which countries for civil nuclear cooperation?
- Which of the following is *not* associated with NAFTA?