Question

The nature of goods and services denotes which of the following terms in international trade?

• A. Volume of trade
• B. Composition of trade
• C. Direction of trade
• D. Balance of trade

Hint:

To remember these terms, use simple questions: - \textbf{Volume?} → How much? (Value/Quantity) - \textbf{Composition?} → What? (Nature of goods) - \textbf{Direction?} → With whom? (Trading partners) - \textbf{Balance?} → Difference? (Exports - Imports)

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The question asks for the specific term in international trade that describes the types or 'nature' of goods and services being traded.
Step 2: Detailed Explanation:
- Volume of trade: This refers to the total quantity or value of goods and services traded. It measures 'how much' is being traded.
- Composition of trade: This refers to the types of goods and services that a country exports and imports. It describes the 'what' or the 'nature' of the trade, for example, whether a country primarily exports raw materials and imports manufactured goods. This matches the question's description.
- Direction of trade: This refers to the countries with which a country trades. It describes 'with whom' the trade is happening.
- Balance of trade: This is the difference between the value of a country's exports and its imports.
Step 3: Final Answer:
The nature of goods and services is denoted by the term 'Composition of trade'.