Question

Why trade is called an engine of growth?
A. Because it helps in the increase of foreign currency reserve
B. It makes available all kinds of goods anywhere
C. Trade increases technology transfer
D. It improves the welfare of the workers
E. All of these

Answer 1

Hint: Trade refers to the import and export of goods from one country or individual to another, often exercised in exchange for money. Trade can either be within a territory of a country or within two countries.

Complete answer: No country in this world is self-sufficient in all its needs. Goods produced by one country are required by others and vice versa. Consequently, contrasts in assets, requirements, and advancement among countries make conditions for International trade between them. It helps in the exchange of surplus goods with those of deficit countries through foreign trade.

Now let us examine the options
Option A - International trade contributes to a country’s economic growth, rising income levels of people. Thus, increasing foreign exchange reserves.
Option B - Foreign exchange or trade makes accessible a wide range of merchandise anyplace in the world.
Option C - Exchanging or trading makes the most recent innovation promptly accessible to the organizations working in these domains, bringing about expanded rivalry both in the domestic and global arena.
Option D - Request in the expansion of goods and services expands the interest for trade, thus increasing the need for employment. Broadening exchanges give greater employment opportunities.
Option E - Trade is called an engine of growth because it leads to the increase of foreign exchange revenues, makes a wide variety of goods accessible in the global market, expands the technology transfer among nations and also improves the well-being of the works with greater employment opportunities.

Therefore, The correct answer is Option E.

Note: Trading of goods has helped India to improve its productivity of manufactured goods. The launching of the Suez Canal in 1869 prompted the decrease of distance among India and Europe which prompted an expansion in the interest for India's commercial crops. Thus, production and trading of industrial crops expanded.