The correct option is 2, 3 and 4 only.
Explanation
International trade involves the exchange of capital, goods, and services across international borders. It is a crucial component of the global economy and significantly influences a nation's Gross Domestic Product (GDP).
Statement-wise Analysis:
- Statement 1 is Incorrect: Trade is not restricted to the exchange of goods (merchandise) alone. It encompasses the exchange of both goods and services. Services trade includes sectors such as travel, transportation, insurance, and information technology.
- Statement 2 is Correct: International trade enables countries to specialize in the production of goods and services in which they have a comparative advantage. This specialization increases efficiency and total output, thereby adding to the national income.
- Statement 3 is Correct: The Balance of Trade represents the difference between the value of a country's exports and imports. A favourable balance of trade (or trade surplus) occurs when the value of exports exceeds the value of imports.
- Statement 4 is Correct: India has a diversified export basket. Engineering goods and chemicals (including pharmaceuticals) are among the leading commodities exported by India, alongside petroleum products and gems and jewelry.
Key Takeaway: International trade includes both goods and services. A favourable balance of trade is achieved when a country's exports are greater in value than its imports.