Economics • Economic BasicsEasy
In the context of international trade, what does 'Autarky' refer to?
A. A trade agreement between two developing nations
B. An economic state where a country is self-sufficient and engages in no international trade✓ Correct Answer
C. A fixed exchange rate regime backed by gold reserves
D. Protectionist tariffs imposed on manufactured goods
💡 Solution & Explanation
Autarky describes an economic state of complete self-sufficiency where a country neither exports nor imports goods and services with external nations. Options involving trade agreements or fixed exchange rates refer to different international monetary arrangements rather than isolationist economic policies. Historically, absolute autarky is extremely rare in modern globalized economies. A related economic concept is protectionism, where a nation limits trade selectively rather than cutting it off entirely.
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