Challenges and Features of Trade

What was one major challenge of the barter system in early trade?

• Lack of transportation

• Difficulty in matching needs between parties

• Excessive taxation

• Use of a standard currency

Which of the following made modern trade more efficient compared to barter systems?

• Use of caravans

• Introduction of money

• Establishment of the Silk Road

• Reliance on small local trade

What does "bilateral trade" involve?

• Trade between multiple countries

• Trade between two countries with a negotiated agreement

• Trade without any formal agreements

• Global trade regulated by international organizations

What is one key feature of multilateral trade?

• Involves only two countries

• Imposes customized rules for specific countries

• Includes common rules that apply to all participating nations

• Avoids the involvement of international organizations

What is the primary role of the World Trade Organization (WTO)?

• Protect intellectual property globally

• Negotiate and enforce international trade rules

• Oversee private contracts between businesses

• Regulate the global oil market

What is the purpose of the United Nations Convention on Contracts for the International Sale of Goods (CISG)?

• Protect consumer rights in domestic markets

• Standardize rules for international sales contracts

• Regulate tariffs between countries

• Create guidelines for private investment

Why is "good faith" important in international trade contracts?

• It ensures that parties meet delivery deadlines.

• It prevents disputes over applicable law.

• It requires parties to act honestly and fairly in business dealings.

• It allows businesses to avoid customs regulations.

What does "freedom of contract" allow businesses to do in international trade?

• Avoid customs regulations in their country

• Choose the terms and conditions of their agreements

• Ignore international trade laws

• Select a neutral third party for dispute resolution

What is the main function of Incoterms provided by the International Chamber of Commerce (ICC)?

• Define the legal framework for shipping goods internationally

• Resolve disputes between countries in international courts

• Standardize trade terms for international shipping and logistics

• Establish tax regulations for global trade

In international trade law, which principle means "agreements must be kept"?

• Lex Mercatoria

• Good faith

• Pacta Sunt Servanda

• Res ipsa loquitur