Which one of the following are types of international trade ?
(a) Bilateral trade
(b) Unilateral trade
(c) Multi-lateral trade
(d) Collateral trade
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is option 3: (a) and (c) only
International trade may be categorised into two types: (a) Bilateral trade: Bilateral trade is done by two countries with each other. They enter into agreement to trade specified commodities amongst them. For example, country A may agree to trade some raw material with agreement to purchase some other specified item to country B or vice versa. (b) Multi-lateral trade: As the term suggests multi-lateral trade is conducted with many trading countries. The same country can trade with a number of other countries. The country may also grant the status of the “Most Favoured Nation” (MFN) on some of the trading partners.