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Chapter 12 : International Business-II

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 EXERCISE: MULTIPLE CHOICE QUESTIONS 
Q1. Which of the following documents are not required for obtaining an export
license?
A. lEC number
B. Letter of credit
C. Registration cum membership certi cate
D. Bank account number
Correct Answer: (B) Letter of credit
Q2. Which of the following documents is not required in connection with an

import transaction?
A. Bill of lading
B. Shipping bill
C. Certi cate of origin
D. Shipment advice
Correct Answer: (A) Bill of lading
Q3. Which of the following do not form part of duty drawback scheme?
A. Refund of excise duties
B. Refund of customs duties
C. Refund of export duties
D. Refund of income dock charges at the port of shipment.
Correct Answer: (D)
Q4. Which one of the following is not a document related to ful l the customs
formalities:
A. Shipping bill
B. Export licence
C. Letter of insurance
D. Proforma invoice
Correct Answer: (D)
Q5. Which one of the following is not a part of export documents?

A. Commercial invoice
B. Certi cate of origin
C. Bill of entry
D. Mate
Correct Answer: (C) Bill of entry
Q6. A receipt issued by the commanding of cer of the ship when the cargo is
loaded on the ship is known as:
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A. shipping receipt
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B. mate receipt
C. cargo receipt
D. charter receipt
Correct Answer: (B) mate receipt
Login Account  Q7. Which of the following document is prepared by the exporter and includes
details of the cargo in terms of the shippers name, the number of packages, the
shipping bill, port of destination, name of the vehicle carrying the cargo?
A. Shipping bill
B. Packaging list
C. Mate
D. Bill of exchange
Correct Answer: (A) Shipping bill
Q8. The document containing the guarantee of a bank to honour drafts drawn
on it by an exporter is:
A. letter of hypothecation
B. letter of credit
C. bill of lading
D. bill of exchange
Correct Answer: (B) letter of credit
Q9. Which of the following does not belong to the World Bank Group?
A. IBRD
B. IDA
C. MIGA
D. IMF
Correct Answer: (D)
Q10. TRIP is one of the WTO agreements that deal with:

A. trade in agriculture
B. trade in services
C. trade related investment measures
D. None of the above
Correct Answer: (D)
 EXERCISE: SHORT ANSWER QUESTIONS 
Q1. Discuss the formalities involved in getting an export licence.

Answer: Before exporting goods, it is mandatory for exporters and export rms to ful ll the legal formalities,
including securing an export license. The following are the formalities to obtain an export license.
1. Bank account number: An exporter must open an account in a bank authorised by the Reserve Bank of India and get
an account number.
2. IEC code: An export rm must obtain an IEC (Importer Exporter Code) from the Directorate General for Foreign
Trade (DGFT) or the Regional Import Export Licensing Authority by submitting documents such as the exporter’s
pro le, prescribed certi cates, two attested photographs and details of non-resident interest.
3. Registration-cum-membership certi cate: An export rm should get itself registered with the appropriate Export
Promotion Council, such as the Engineering
Export Promotion Council (EEPC) and the Apparel Export Promotion Council (AEPC), and obtain a Registration-Cum-
Membership Certi cate (RCMC).
4. Registration with ECGC: An export rm must also get itself registered with the ECGC (Export Credit and
Guarantee Corporation) in order to protect itself from any uncertainties in payments brought upon by political or
commercial risks.
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EXIM First 100mcqs - mcq on export procedure and

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export import (University of Lucknow)
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MULTIPLE CHOICE QUESTIONS
as stake holders
1. The investment in productive assets and participation in management
in business enterprises is
a. FDI
b. FII
C. Balance of payment
d. SDR
Answer : a. FDI
2 The portfolio investment by foreign institutional investors is called
a. FDI
b. FII
C. Balance of payment
d. SDR
Answer:b. FII
3. Consider the following statements and identify the right ones.
a. India adopted LERMS in 1992
b. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.
C. both
d. none
Answer: c. both
4. Which of the following is international trade?
a. Trade between provinces
b. Trade between regions
C. Trade between countries
d. (b) and (c) of above
Answer:c. Trade between countries
5. Theory of comparative advantage was presented by
a. Adam Smith
b. Ricardo
C. Hicks
d. Arshad
Answer:b. Ricardo
6. If Japan and Pakistan start free trade, difference in wages in two countries will:
a. Increase
b. Decrease

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Multiple Choice Questions
C. No effect 227
d. Double
Answer: b. Decrease
7 Trade between two countries can be useful if
cost ratios of
a. Equal goods are:
b. Different
C. Undetermined
d. Decreasing
Answer: b. Different
8. A tariff is:
a. A restriction on the
number of export firms
b. Limit on the amount of
C. Tax and
imported goods
imports
d. (b) and (c) of above
Answer: c. Tax and
9. Underlying the
imports
that trade
application of the monopolistic competition model to trade is the idea
a. increases market size
b. allows
companies to charge higher price
C. increases consumer choices
d. decreases the number of firms in an
Answer: a) increases market size
industry
10. Which of the
following trade policies limits specified quantity of goods to be imported at
one tariff rate?
a. Quota
b. Import tariff
C. Specific tariff
d. All of the above
Answer: a) Quota
. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in
a. Military capabilities
b. labour productivities
relative availabilities of factors of production
d. tastes
12swer: (c) relative availabilities of factors of production
1CC rding to Ricardo, a country will have a comparative advantage in:
nor exports
dustries in which thereare neither imports
mport competiting industries
ndustries that sell to domestic and foreign buyers
ndustries that sell to only foreign buyersand
foreign buyers
SWer: c) Industries that sell to domestic short-term
13. Internatio unemployment in:
ernational Trade is most likely to generate
Lndustries in which there are neither imports exports
nor
mport-competing industries
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and Docum
imentatio
Procedure
Export-Import
228
domestic and foreign buyers.
Industries that sell to
only foreign buyers
C.
d. Industries that sell to

industries
Answer: b) Import-competing
services are
known a s .
and
14. The exchange of goods
a. Domestic Trade
b. International Trade
C. Trade
d. None of these.
Answer:C. Trade i n that it provides all the
economy is advantageous
15. Free traders maintain that an open
following except:
a. Increasedcompetition for world producers
A wider selection of products for
consumers
b.
workers
C. Relativelyhigh wage levels for all domestic
d. The utilization of the most efficient production methods
Answer: c. Relatively high wage levels for all domestic workers
16. Name the two schemes introduced under the new foreign trade policy?
a. Merchandise Export from India Scheme & Services Export from India Scheme
b. Services Export from India Scheme & Services Import from India Scheme
C. Services Import from India Scheme & Merchandise Export from India Scheme
d. Merchandise Import from India Scheme & Services Export from India Scheme
Answer: a. Merchandise Export from India Scheme & Services Export from India
Scheme
17. Consider the following statements about the
1st Apr 15.
Foreign Trade Policy 2015-20 unveiled on
A. This policy focuses on
boosting exports and create jobs while supporting the
Centre's Make In India' and
B. The
India' Digital programs.
new policy is to create architecture for the Indian
global competitiveness and promote the economy so that it can Bau
C. The policy is to move diversification of Indian export.
towards paperless
D. The
policy comes at a time when export working in 24x7 environments.
2014-15, reporting a negative growth contracted 15 per cent in Fedioruar
a. A & B is
correct
growth for the third consecutive month.
b. B&C is
C.
correct
A, B & D is correct
d. All of the
above is correct
Answer: d. All of
18. The Indian the above is correct
a. 30th
Government unveiled the new
Mar 2015
b. 31st Mar
Foreign Trade Policy 2015-20 on
2015
C. lst
d. 30th
April 2015
April 2015
Answer: c. 1st
April 2015
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229
2016-17, which of the
19. During following items under
highest share in (ndia's exports? manufacturing goods sector had the
and Jewellery
a. Gems
b. Engineering goods
C. Chemical and related products
d. Handicrafts
Answer: a) Gems and Jewellery
a0 Which trade policy results in the government
valorem tariff on imported goods: levying both a specific tariff and an ad-
a. Compound tariff
b. Nominal tariff
C Effective tariff
d. Revenue tariff
Answer: a. Compound tariff
21. Concerning a government's trade policy, all of the following generally apply except
a. economic downturn and recession
generally result in greater protectionism
b. because domestic consumers outnumber domestic
enact Free-trade policies to satisfy the consumer
producers, policy makers usually
majority
C. when domestic exporting companies are organized, policy tends to favor freer trade
d. policy tends to favor freer trade in countries whose imports are inputs into critical
industries
Answer: b. because domestic consumers outnumber domestic producers, policy
makers usually enact Free-trade policies to satisfy the consumer majority
.The strongest political pressure for a trade policy that results in higher protectionism
comes from:
a.D. domestic workers lobbying for import restrictions
domestic workers lobbying for export restrictions
restrictions
C.domestic consumers lobbying for export
.domestic consumers lobbying for importrestrictions
for import restrictions
Wer: a. domestic workers lobbying market, suppose the Japanese government
Mexico's radio
P Its firms penetrate for each radio shipped to Mexico. As
a result of this
POVides them a subsidy of $15
trade policy 30 radios
Mexico equals $60 and its imports equal
in
e price of radios Mexico equals $30 and its imports equal 30radios
p r i c e of radios in 20 radios
and its imports equal
C.
the price of radios in Mexico equals $40 and its imports equal 40 radios
d. $20 30 radios
the price of radios in Mexico equals and its imports equal
An swer: b. the price inMexico equals $30 liberalize
to
trade
24.
4Foll D. pric of radios and other countries sought
ollowing World War II, the
United
among each other. The first major

States
postwar step
toward trade
liberalization was ihe
Trade
aa. Tariffs and
eneral
b.
reement on
World Trade Organization

*
C.Smoot-Hawley anization Policy

d. McKinle PementDownloaded
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Export-Import Procedure and Document

230 nentation
on Tariffs and Trade
Answer: a. General Agreement domestic companies in
suggests that government can assist
25. The theory
of competitors
capturing economic profits from foreign
a. international dumping
b. countervailing duties
C. strategic trade policy
d. export promotion policy
Answer: c. strategic trade policy
26. The U.S. has granted China permanent most-favored-nation
treatment (normal trade
from China
relations).This means that the tariff schedules which apply to U.S. imports
a. have tariff rates equal to zero, suggesting a free trade policy for the United States
b. have lower tariff rates than the rates that apply to any other country sending goods
to the United States
C. have tariff rates that are identical to the rates that apply to other countries to which
the U.S. grants most-favoured-nation treatment
d. have lower tariff rates than the rates that apply to other countries to which the U.S.
grants Most-favoured-nation treatment
Answer: c. have tariff rates that are identical to the rates that apply to other countries
to which the U.S. grants most-favoured-nation treatment
27. WTO agreement came into force fromn
a. January 1, 1994
b. January 1, 1995
C. January 1, 1996
d. January 1, 1998
Answer: b. January 1,1995
28. What does EPZ stands for?
a. Export Production Zone
b. Export Promotion Zone
C. Export Processing Zone
d. Export Payment Zone
Answer: c. Export Processing Zone
29. Which of the following
a. World Bank
organisations prepare Human Development Report?
b. International Monetary Fund (IMF)
C.
United Nations Organisation (UNO)
d. United Nations Development
Programme (UNDP)
Answer: (D) United Nations Development Programme (UNDP)
30. Which of the
following. is not an important document in foreign trade?
a. a check for the value of
b. a draft
goods
c. bill of lading
d. a letter of credit
Answer:a.a check for the value of goods
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231
31. risk is the potential

exchange loss from outstanding obligations as a result of
exchange-rate fluctuations.
a. Trade
b. Exchange
c. Finance
d. Transaction
Answer:d. Transaction
32. Which of the following is not a condition for drafts to be negotiable?
must be in writing, signed
a.
by the drawer
b. must contain a promise to
pay a certain sum if goods are received
c. must contain an order to
pay
d. must be payable on sight or at a
Answer: b. must contain a promise to
specified date
pay a certain sum if goods are received
33. If a draft is made to bearer,
payment should be made to .
a. a bank
b. drawer
C. acceptor
d. anyone who presents the draft
Answer: d. anyone who presents the draft
34. Forms of countertrade include the
following except.
a. simple barter
b. clearing arrangement
C. switch trade
d. counter purchase
Answer :c. switch trade
35. Documentary drafts require various shipping documents such as
a. bills of
lading
b. insurance certificates
C. commercial invoices
d. A, B, and C
Answer: d.A, B, and C
36. When IBM ships products to its subsidiary in Argentina, it will most likely use a
draft.
a. sight
b. clean
C. D/P
d. demand
Answer: b. clean
7. A(n) bill of lading does not guarantee that the goods have been loaded on the
37. A(r)
vessel.
a. on-board
b. foul
C.received-for-shipment
d. straight
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Export-Import Procedure and Documentation

232
Answer: c.received-for-shipment
38. Which of the following is not true of a letter of credit?
a. it is a document
b. issued by a bank
C. at the request of the exporter
d. the bank agrees to honor a draft drawn on the importer
Answer: c.at the request of the exporter
39. If a letter of credit can be neither cancelled nor modified without the consent of all
parties, it is known as.
a. revolving
b. irrevocable
C. revocable
d. unconfirmed
Answer: b. irrevocable
40. If an exporter is doubtful about an issuing bank's ability to pay, he will expect a
domestic bank to join the transaction in a letter of credit.
a. revolving
b. irrevocable
C. revocable
d. confirmed
Answer:d. confirmed
41. Which of the following may be required as additional documents in a letter of credit?
a. commercial invoice
b. insurance document
C. consular invoice
d. confirmed
Answer: d.confirmed
42. A commercial invoice is issued by.
a. exporter
b. exporter's bank
C. importer
d. importer's bank
Answer: a. exporter
43. A document that contains a precise description of the goods is known as a
a. weight list
b. packing list
C. commercial invoice
d. certificate of origin
Answer: c.commercial invoice
44. Which of the following is not true of a consular invoice?
a.
provides customs officials with all information
b. facilitates easy customs clearance
C. helps customs officials assess duties
d. issued by the consulate of the
exporting country
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233
Answer: d.issued by the consulate of the
45. Which of the following is not a form of exporting country
offset
a. coproduction agreements?
b. licensed production
c. subcontractor production
d. cash in advance
Answer: d.cash in advance
46. Which of the following
is not a form of
a. barter
countertrade?
b. consignment
C. switch trading
d. counterpurchase
Answer: b.consignment
47. In a
countertrade
of the original sale.
the initial seller receives
compensation in products that arise out
a. consignment
b. barter
C. counterpurchase
d. buy-back agreement
Answer: d.buy-back agreement
48. Buying a company's accounts receivable on a nonrecourse basis is known as
a. switch trading
b. financing
C. factoring
d. funding
Answer: c.factoring
49. Which of the following is not necessarily a party to a forfaiting transaction?
a.
exporter
b. importer
C. broker
d. bank
Answer: c.broker
0. Below are five steps involved in a typical trade transaction. Which step is out of order:
a. exporter agrees to ship under a letter of credit

b. exporter ships the product to the importer
C. importer's bank issues the letter of credit
d. exporter prepares a 60-day draft on importer in accordance with the letter of credit.
Answer: c. importer's bank issues the letter of credit
. The "three C's" of international commerce are
a. customers
b. commitment
C.
currency
d. A and B
Answer: d. A and B
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234
Export-Import Procedure and
Documentatation
used for all of the following except:
52. Letters of credit are
customs release of goods
a. As an important way of facilitating
b. As a standby to guarantee a perform obligation
of goods
c. As a method of financing export/import
d. As a device to guarantee payment obligation
Answer: a. As an important way of facilitating customs release of goods
53. The exporter is allowed to receive an advance on the letter of credit before presentation
of thenecessary documents. This type of financing is:
a. Factoring
b. Forfeiting
c. Transferable letter of credit
d. Red clause credit
Answer: d. Red clause credit
54. The Ex-Im Bank was created in and established under its present law in, with the aim of
assisting in the- financing of U.S. export trade. It was originally established to finance
exports to Europe after World War IL
a. 1934; 1955
b. 1934;1945
C. 1936; 1955
d. 1936; 1945
Answer: b. 1934;1945
55. The two types of marine
cargo insurance policies are:
a.
Perils-only policy and all-risks policy
b. Perils-only
policy and marine-risk policy
C. Marine-risk policy and all-risks
d. Marine-risk
policy
policy and perils-only policy
Answer: a. Perils-only policy and all-risks
56. Which form is
policy
required for the completion of such particulars as points of shipment and
destination, description of units, and amount of insurance?
a. Customs form
b. Air waybill
C. Declarations form
d. Bill of lading
Answer: c. Declarations form
57. Insurance certificates are used because:
a.
They are less èxpensive.
b. Exporters tend to use them frequently.
c.
They save time.
d. They are required by government
Answer: c. They save time. agencies.
58. Once an insurance
a. Residual rights company
settles the insured's
claim, it exercises:
b. Subrogation rights
C. Indemnity rights

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235
d. Claim rights
Answer: b. Subrogation rights
59. The CPT term is similar to the CIP
term, except that:
a. The seller is not
required to arrange or pay for insurance coverage of goods during
transportation.
b. The seller is required to arrange or pay for insurance coverage of goods during
transportation.
c. The buyer is not required to arrange or pay for
coverage goodsthe insurance of
during transportation.
d. The buyer is required to
arrange or pay for the insurance coverage of goods during
transportation.
Answer: a. The seller is not required to arrange or pay for insurance coverage of goods
during transportation.
60. Most unsafe mode by which firms perform worldwide business is
a. licensing
b. Franchising
C. International Trade
d. The establishment of new subsidiaries
Answer:d. The establishment of new subsidiaries
61. If all prices in one
country (country A) are higher than all príces in another country (B)
when compared at the wage rates that happen to prevail in the two countries, and if the
Countries share the same currency, then if the nominal wage rate in country B remains
fixed
a. The nominal wage rate in country A will have to fall.
b. Unemployment must be higher in country B than in country A.
C. The real wage in country A must be higher than in country B.
d. Workers in country A must be less productive than workers in country B.
Answer: a. The nominal wage rate in country A will have to fal.
62. According to the theory of comparative advantage, a country will export a good only if
a. It can produce it using less labor than other countries.
b. Its productivity is higherin producingthegood than the productivity of other
countries in producing it.
C. Its wage rate in producing the good is lower than in other countries.
d. Its cost of producing the good, relative to other goods, is at least as low as in other
countries.
Answer: d. Its cost of producing the good, relative to other goods, is at least as low as
inother countries.
05. If international trade takes place as a result of comparative advantage, it will cause
which of the following effects in the participating countries?
will be reduced.
dnequality among households
off.
D. All individuals in each country will be better
in both countries will increase.
C. The average well-being of people
.Both countries will grow faster time. over
Answer: c. The average well-being of people in both countries will increase.

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Export-Import Procedure and Documentation
236 trade?
international
cost Theory of
the opportunity
64. Whopropounded
a. Ricardo
b. Marshall
c. Heckscher & Ohlin
d. Haberler
Answer: d. Haberler
correct?
65. Which among the following is NOT
works on the market
mechanism
rate system
a.
a. Floating exchange
uncertainties and speculation
b. Floating exchange rate breeds the choice of the
factors and value judgments influençe
C. and
Economic political
exchange rate system
government
d.. The system of floating exchange rate requires comprehensive
intervention
rate requires comprehensive government
Answer: d. The system of floating exchange
intervention
international exchange between
66. Terms of trade that relate to the Real Ratio of
commodities is called:
a. Real cost terms of trade
b. Commodity terms of trade
C. Income terms of trade
d. Utility terms of trade
Answer: c: Income terms of trade
67. Who among the following enunciated the concept of single factoral terms of trade?
a. Jacob Viner
b. G.S. Donens
C. Täussig
d. J.S. Mill
Answer: a. Jacob Viner
68. Infant industry argument in international rade is given in support of
a. Granting Protection
b. Free trade
C. Encouragement to export oriented small and tiny industries
d. None of the above
Answer: Granting Protection
69. Which of the following is also known as International Bank for Reconstruction ana
Development?
a. Asian Development Bank
b. World Bank
C. Reserve Bank of India
d. International Monetary Fund
Answer: b. World Bank
70. A change in fiscal
policy affects the balance of payments through:
aThe current account only
b. The capital account
only
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237
Both, the current account and capital account

a Neither current account nor capital account
Answer: Both, the current account and capital account
A changein fiscal policy attects the balance of
payments through:
a. The current account only
b. The capital account only
C. Both, the current account and capital account
d. Neither current account nor capital account
Answer :c. Both, the current account and
capital account
2. A change in fiscal policy affects the balance of payments through:
a. The current account only
b. The capital account only
C.Both, the current account and
capital account
d. Neither current account nor capital account
Answer: d. Neither current account nor capital account
73. One of the following
is NOT an
a. Import of defense material
advantage of international trade?
b. Deperndence on foreign countries
c. Export of surplus production
d. Availability of cheap raw materials
Answer: b. Dependence on foreign courntries
74. In trade policieslimits specified the number of goods to be imported at one tariff rate.
a. Specific tariff
b. Import tariff
C. Quota
d. Both A and B
Answer: c. Quota
75, We can trade between the two countries and this trade is very helpful if the cost ratios of
goods are
a. Decreasing
b. Undetermined
C. Different
d. Equal
Answer: c. Different
0. Iwo countries gain foreign trade with_
a. Tariff rates are different
b. Cost ratios are different
C. Price ratios are different

d. Both B and C
Answer: D. Both B and C
77. Conference of Bogota introduced in-year
a. 1948
b. 1935
C. 1956 .

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238 Export-Import Procedure and Documentation

d. None of these
Answer: A. 1948
78 is the father of International Law.
a. Suerez
b. Oppenhein
C. Hago Grotius
d. Both A and B
Answer: C. Hago Grotius
79.One of the following policies about exports and imports?
a. Fiscal policy
b. Monetary policy
C. Commercial policy
d. Both A and B
Answer: C. Commercial policy
80. Unit in a technology park is not eligible for
a.
exemptiontrom import duty
bexemption from quantitative restrictions
C.ax exemptions
d. exemptions from registration requirements
Answer:D. exemptions from registration requirements
81. Spécial Economic Zones are
a situated outside India, but subject to RBI control
treated as foreign territory and not Indian laws
governed by international and not Indian laws
d. prohibited from buying from Domestic Tariff Area
Answer: B. treated as foreign territory and not Indian laws
82: Duty Drawback is available for
a.
Import duty on imported components
b. Central excise on indigenous components
C.
C Import duty and central excise on indigenous components
d.Import duty, central excise and VAT
Answer: C. Import duty
83. Export Promotion
and central excise on indigenous components
Capital Goods Scheme allows import of capital goods.
a. Free of
import duty
b. With concessional
duty of 5 per cent with no export obligation
C. With concessional
duty of 5 per cent with export obligation 8 times the duty saved
d.With concessional duty of 5 per cent with
export obligation 8 times the import made
Answer:C. With concessional of 5 duty per cent with
duty saved export obligation 8 times the
84. Import of capital goods under EPCG scheme is subject to
a. Terms and conditions of
b. Conditions of law of agreement
C. Actual user conditionéxporting country
d. Conditions of law of importing
country
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239
Answer: C. Actual user condition
a5 The export promotion scheme that enables
the post
inputs used in the export product is. export replenishment of duty on
a. Replenishment licence.
b. Duty remission scheme
c. Duty exemption scheme
d. Duty free replenishment certificate
Answer: B. Duty remission scheme
86. The export promotion scheme with the
duty on the import content of the objective to neutralize the incidence of Customs
export
Export Promotion Capital Goods product
is.
a.
b. Export Credit Guarantee

C. Duty Free Replenishment
d. Duty Entitlement Passbook
Answer: D. Duty Entitlement Passbook
87. The
licence that is transferable is
a. Export licence
b. Advance licence
C. DEPB licence
d. REP licence
Answer: C. DEPB licence
88. The Imports and Exports (Control) Act
came into enforcement from
a. 1947
b. 1950.
C. 1951
d. 1955
Answer: A. 1947
89. The IEC number is issued by the
a. Central Government
b. State Government
C. Director General of Foreign trade
d. Ministry of commerce
Answer: C. Director General of Foreign trade
0. The IEC number is a number with
a. 7 digits
b. 8 digits
C. 9 digits
d. 10 digits
Answer: D. 10 digits
The Director General of Foreign trade is appointed by
a. Central Government
b. State Government
C.
Ministry of commerce
Chief justice of the Supreme Court
lOMoARcPSD|8175019
ntation
240
Answer: C. Ministry of commerce in the year

92. The foreign
Trade (Regulation) Rules was passed
a 1991
b. 1992
C. 1993
d. 1994
Answer: C 1993
in India is subject to
93. An OBU set up in SEZ by a bank
a. No Capital Adequacy Norms
b. No prudential Accounting Norms
C. No CRR/SLR stipulation of
RBI
d. No restrictions from Govt of India
Answer: D. No restrictions from Govt of India
it can be said that the
94. If a is having more exports than imports in value terms,
country
country is having
a. Deficit under BOP
b. Deficit under BOT
C. Surplus under BOT
d. Surplus under BOP
Answer: D. Surplus under BOP
95. The apex body of the Foreign Trade is
The Central Government
b. The State Government
c. The Ministry of Commerce
d. All the above
Answer:C. The Ministry of Commerce
96. The tenure of the Foreign Trade policyis
a. 3 years
b. 5 years
C. 1 year
d. 7 years
Answer :B. 5 years
97. The threshold limit for the handloom
industry as per the recent EXIM policy is.
a. Rs. 500 crores
b. Rs.350 crores
c. Rs. 250 crores
d. Rs. 100 crores
Answer: C. Rs. 250 crores
98. The customs
duty paid for the import of capital goods as per 2009-2014 policy 1s
a. 2 per cent
b. per cent
C. 5 per cent
d. 8 per cent
Answer: C.5 per cent

lOMoARcPSD|8175019
Multiple Choice Ques tions 241
99. How many chapters are there in The Foreign Trade (Development and Regulation) Act,
1992?
a 5
b. 4
C. 6
d. 7
Answer: C. 6
100.The period of time permitted for the fulfilment of the export obligation under EPCG is
a. 5 years
b. 8 yearTs
C. 7 years
d. 10 years
Answer: B. 8 years
101. The geographically distributed area or zone where the economic laws are more liberal
as compared to other parts of the country is called
a. EOU
b. SEZ
C. AEZ
d. FTZ
Answer:B. SEZ
102. What does CCIE stand for?
a. Chief Controller of Imports and Exports
b. Central Cottage Industries Exports
C.Control on Cotton and
Commissioner of Central
Imports
Imports and Exports
Exports
d.
Answer: A. Chief Controller of Imports and Exports
103. Bill of Lading is issued by the
a. captain of the vessel
b. shipping company
C. customs authorities
d. consignor
Answer: B. shipping company
04. The notice for claim under the carriage of goods by rail is
to be made within
a, 3 months
b. 4 months
C. 5 months
d. 6 months
Answer: D. 6 months
05. The Warsaw Convention on the International Air transport was announced in
a. 1929
. 1934
C 1955
d. 1972
Answer: A. 1929
26/04/2021 Import Export Mock Test - Vskills Practice Tests
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Answer Sheet
Q1) ___________theory focuses on the in ation – exchange rate relationship
1.  Interest rate parity
2.  International Fisher Effect
3.   Purchasing power parity
4.  Traditional Model
Q2) when did India adopt The ALIGNED DOCUMENTATION SYSTEM (ADS)?
Submit Test
1.  1990.0 Get Govt. Certi ed
https://www.vskills.in/practice/import-export-mock-test 1/13
2.   1991.0
3.  1992.0
4.  1994.0
Q3) A price agreed on CIF basis
1.  does not include the freight charges
2.  includes freign charges up to the port of lading
3.   includes freight charges up to the port of unloading
4.  includes freight charges upto the importer's works
Q4)
What are Incoterms?
1.  a set of terms for policy formulation
2.  a set of rules for trade
3.  a set of negotiationary tactics
4.   a set of pre de ned terms used in trade
Explanation:-
Incoterms are a set of rules which de ne the responsibilities of sellers and buyers for the
delivery of goods under sales contracts. They are published by the International Chamber of
Commerce (ICC) and are widely used in commercial transactions.
Q5) Which of these accurately describes CIF
1.  FOB+Shipping +Freight+Insurance
2.   A + unloading
3.  B + customs charges
4.  C + transport to importers surroundings
Q6) who publishes incoterms?
1.  IMF
2.  WTO
Submit Test
3.   ICC Get Govt. Certi ed
4.  UN
Q7) _____ is the risk of loss of principal or loss of a nancial reward stemming from a borrower's
failure to repay a loan or otherwise meet a contractual obligation.
1.  aggregate risk
2.  settlement risk
3.   credit risk
4.  jurisdiction risk
Q8) Since there is a time value to money, the spot exchange rate of a currency is always lower than
the forward exchange rate.
1.  true
2.   false
3.  FALSE
4.  FALSE
Q9) WTO Agreement related to investment measures is
1.  TRIPS
2.  TRIMS
3.   GATS
4.  TCA
Q10) what is shipping bill?
1.   a form used by customs before goods can be exported
2.  a form for buying goods
3.  a form for buying a ship
4.  a form for selling ships
Q11) Translation loss is
1.  loss to the parent company
2.   loss to the subsidiary company
3.  A notional loss
Submit
4.  An actual Test
loss. Get Govt. Certi ed
Q12) re ection of a nostro account is known as ________ account
1.   NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q13) _________ are the exchange of one set of cash ows (based on interest rate speci cations) for
another
1.  accreting principal swap
2.  reverse swap
3.  interest rate swap
4.   basis rate swap
Q14) India's position in terms of export growth rate in the world?
1.   First
2.  Second
3.  Fourth
4.  Seventh
Q15) what is the full form of FTZ?
1.   free trade zone
2.  free transaction zone
3.  frieght trade zone
4.  free tax zone
Q16) this account is held by a 3rd party bank, other than the account maintaining bank or with
whom account is maintained
1.  NOSTRO
2.  VOSTRO
3.   MIRROR
4.  LORO
Submit Test Get Govt. Certi ed
Q17) The price at which a market maker is prepared to sell (a currency) or lend (money)
1.  forward rate
2.   offer rate
3.  bid rate
4.  sport rate
Q18) The role of a freight forwarder can include all of the following except:
1.   pre-shipping counseling
2.  production of the shipping documents
3.  negotiation of payment terms
4.  handling of credit transactions between banks
Q19) Which of these is not an essential service provided by C&F agents
1.   Warehousing before transportation
2.  Selection of mode of transport
3.  Cargo Insurance
4.  Warehousing after transportation
Q20) Country with lowest lending interest rate?
1.  India
2.  UK
3.   USA
4.  Japan
Q21) Exporters use an export management company as
1.  a direct selling strategy
2.  risk enhancement strategy
3.  an indirect selling strategy
4.   none of these
Q22) What is the simplest mechanism of entering a foreign market?

1.  Licensing agreement.
2.   Joint venture.
3.  Franchising mechanism.
4.  Exporting.
Q23) CCIE stands for
1.  Central Cottage Industries Exports
2.   Commissioner of Central Imports and Exports
3.  Chief Controller of Imports and Exports
4.  Control on Cotton Imports and Exports
Q24) Which of them is the purpose of doing business in international markets
1.  Existence of imperfect markets
2.   To take advantage of the tax bene ts of the foreign country
3.  To develop and sell the products for a particular geographical location
4.  All of these
Q25) most traded forex pairs are
1.  USD/EUR
2.  USD/JPY
3.   JPY/EUR
4.  GBP/USD
Q26) The major players in the foreign exchange market are
1.  commercial banks
2.  corporate
3.   exchange brokers
4.  central bank of the country and the Central Government
Q27) a _______ is a system of exchange rate adjustment in which a currency with a xed exchange
rate is allowed to uctuate within a band of rates
1.  crawling peg
2.  adjustable peg
3.   currency peg
4.  dollarization
Q28) the pro t ratio in foreign exchange is
1.  high
2.  low
3.  high & low
4.   depends on the currencies
Q29) The risk that arises when operating in a foreign place
1.   aggregate risk
3.  credit risk
4.  jurisdiction risk
Q30) A revocable letter of credit ____________.
1.  obligates the exporter's bank to honor a draft presented to it.
2.  can only be amended if all the parties involved agree
3.  can be amended by any of the parties involved at any point
4.   obligates the importer's bank to honor a draft presented to it
Q31) What is WTO?
1.  an intergovernmental organisation that regulates world trade
2.  an international organisation to foster global monetary cooperation
3.  an international nancial institution providing loans to developing country
4.   all of these
Q32) According to Fisher Effect
1.  Forward Premium for a currency indicates its appreciation in future

2.  Forward Premium for a currency indicates its depreciation in future
3.  Forward Rates and spot rates are not linked
4.   Forward Rates are based on expected future spot rates
Q33) what was indias rank in "trading across borders" that is released by the world bank?
1.  127.0
2.  130.0
3.  126.0
4.   135.0
Q34) The tenure of the Foreign Trade policy is
1.  1 yr
2.  5 yr
3.   2 yr
4.  7 yr
Q35) Which of the following agricultural commodity of India gives largest in terms of export value?
1.  Tea
2.  Rice
3.  Spices
4.   Cotton
Q36) The maxim 'buy low; sell high' is for
1.  Quotation of Pound-Sterling
2.  Indirect rates
3.  Direct rates
4.   USD
Q37) Which is the apex body of various exporters and export promotion organizations in India
1.   Trade fair authority of India
2.  Export CreditTest
Submit Guarantee Corporation of India
Get Govt. Certi ed
3.  Federation of Indian Exporters Organization
4.  Director General of Commercial Intelligence and statistics
Q38) When the dollar rises in value relative to a foreign currency, the current assets and current
liabilities of a U.S. foreign subsidiary increase in dollar value.
1.  true
2.  false
3.  FALSE
4.   FALSE
Q39)
How many parties are involved in a bill of exchange?
I. 3 parties
II. 5 parties
III. 4 parties
IV. 2 parties
1.  I & IV
2.  Only I
3.   I & II
4.  I & III
Explanation:-
A bill of exchange is a written order used primarily in international trade that binds one party to
pay a xed sum of money to another party on demand or at a predetermined date.
Q40) Which one is largest source of revenue for Indian Government?
1.  Service Tax
2.  Excise Duty
3.   Custom Duty
4.  Income Tax
Q41) _____ is also called cash market
1.  interbank market
2.   spot market
3.  forward market
4.  none of these
Q42) __________ is not an example of an international trade draft
1.   Time draft
2.  Sight draft
3.  Usance draft
4.  both a & b
Q43) When entering new foreign international markets, marketers need to assess the risks and
rewards of their target markets as well as accurately understand the cultural impact of the country
upon their products. Which of the following are some of the cultural considerations?
1.  1. Understanding the consumer preferences for a product. 2. Ability to deal effectively

with foreign national staff members. 3. The company's adaptation to the local business
culture. 4. Local management ability to function effectively in the international market.
2.  1. Understanding the consumer preferences for a product. 2. Ability to deal effectively with
foreign national staff members. 3. Ensuring that local employees belong to their local trade
union. 4. Ensuring economic stability of the country.
3.  1. Understanding the consumer preferences for a product. 2. Ability to deal effectively with
foreign national staff members. 3. Ensuring that local employees belong to their local trade
union. 4. Local management ability to function effectively in the international market.
4.   1. Understanding the consumer preferences for a product. 2. Offering competitively

priced products. 3. The company's adaptation to the local business culture. 4. Local
management ability to function effectively in the international market.
Q44) what is top traded commodity (export)?
1.  electrical equipment
2.  vehicles other than railways
3.  mineral fuels,oils,distillation products etc.
4.   iron and steel
Q45) what came intoTest

Submit existence under the Marrakesh Agreement?
Get Govt. Certi ed
1.  IMF
2.  WORLD BANK
3.   ICC
4.  WTO
Q46) ________ is a derivative used to transfer in ation risk from one party to another through an
exchange of cash ows.
1.  circus swap
2.  cross-currency swap
3.  in ation swap
4.   stock swap
Q47) MIGA covers risk of
1.  transfer restriction
2.  breach of contract
3.  expropriation
4.   all of these
Q48) simultaneous purchase & sale of foreign currency at different rates is called currency
1.  devaluation
2.  exchange
3.  valuation
4.   swap
Q49) For which of the following goods Import and export in India is not banned?
1.  Narcotic Drugs
2.  Pornographic Material
3.  Indian Coins
4.   Ammunation
Q50) ________ has the least effect on a country's current account
1.  in ation
2.   national income
3.  exchange rate
4.  tax on income from foreign stocks
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Answer Sheet
Q1) Which bank has launched ‘Japan Desk’ to facilitate Japanese corporates investing in India?
1.  PNB
2.  SBI
3.  Dena Bank
4.   Bank of Baroda
Q2) ___________ is a theory in which the interest rate differential between two countries is equal to
the differential between
Submit Testthe forward exchange rate Getand theCerti
Govt. spot exchange
ed rate.
1.  Interest rate parity
2.   International Fisher Effect
3.  Purchasing power parity
Q3) what is duty drawback?
1.  a refund when import duty is paid on a good already exported
2.   a refund on good imported
3.  a drawback of funds for exporter
4.  a refund on goods exported if they are defective
Q4) cash arbitrage explains the determination of
1.  Forward Rates for currencies
2.   Spot rates for currencies
3.  Both forward and spot rates for currencies
4.  Penalty for non-execution of forward contracts
Q5) Lindahl model does not focus on which of the following problems?
1.  Extent of state activity
2.  Allocation of the total expenditure among various goods and services
3.   Allocation of tax burden
4.  States Debt
Q6) SWIFT stands for
1.  Safety Width In Financial Transactions
2.   Society for Worldwide International Financial Telecommunication
3.  Society for Worldwide Interbank Financial Telecommunication
4.  Swift Worldwide Information for Financial Transaction
Q7)
Which is theSubmit
largest Test
country by total international
Gettrade?
Govt. Certi ed
1.  JAPAN
2.  CHINA
3.   EU
4.  USA
Q8) An import quota speci es the __________ amount of a good that can be imported into a
country; a step to becoming more protectionist would involve __________ in the quota.
1.  Maximum; a reduction
2.  Maximum; an enlargement
3.   Minimum; a reduction
4.  Minimum; an enlargement
Q9) IEC number consists of a
1.  6 digit number
2.   4 digit number
3.  10 alphanumeric number
4.  None of these
Q10) Exporting is limited to which sector of the following?
1.  Goods
2.   Service
3.  Both
Q11) what is the full form of IGM?
1.  international guidance manifest
2.  import general manifest
3.   international general manifest
4.  imort guidance manifest

1.   NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q13) In 2015 RBI agreed to do away with which form?
1.   SDF
2.  GAD
3.  EPC
4.  IGM
Q14) what is ISO 9362 KNOWN as ?
1.  trade code
2.   swift code
3.  communication code
4.  bar code
Q15) IFC does not have ___________ as its nancial product
1.   loans
2.  risk management products
3.  equity participation
4.  none of these
Q16) when is pro forma invoice issued?
1.  when the bank approves it
2.  whenever you can pay for it
3.  before the L/C is sent
4.   all of these
Q17) What is WTO?

1.  an intergovernmental organisation that regulates world trade
2.  an international organisation to foster global monetary cooperation
3.   an international nancial institution providing loans to developing country
4.  all of these
Q18)
What are Incoterms?
3.   a set of negotiationary tactics
4.  a set of pre de ned terms used in trade
Explanation:-
Q19) __________ is an interest rate or cross-currency swap where the notional principal grows as it
reaches maturity
1.  basis rate swap
2.  interest rate swap
3.  
accreting principal swap
4.  reverse swap
Explanation:-
An accreting
principal swap
is a derivative contract in which two counterparties agree to

exchange
cash ows, usually a xed rate for a variable rate, as with most other types of interest rate or
cross-currency
swap
contracts.
An accreting principal swap is a swap in which the two parties to the contract agree to pay
interest on a growing principal amount.
Q20) _______ is a participant of the foreign exchange market
1.   central bank
2.  hedgers
3.  speculators
4.  all of these
Q21) a foreign currency account helps to
1.  Avoid transaction cost
2.   Avoid exchange risk
3.  Avoid both transaction cost and exchange risk
4.  Avoid exchange risk and domestic currency depreciation
Q22) The use of the most-favored-nation (MFN) principle [or normal trade relations (NTR)] is an
attempt to attain __________ toward competing suppliers of imports to a country. Hence, the
arrangement whereby developed countries permit duty-free entry on some goods coming from
developing countries but levy tariffs on the same goods if coming from other developed countries
is __________ the MFN [or NTR] principle.
1.  Discrimination; a departure from
2.   Discrimination; an example of
3.  Nondiscrimination; a departure from
4.  Nondiscrimination; an example of
Q23) forward premium depends on
1.   currency uctuation
2.  stock market returns

3.  interest rate differential between 2 countries
4.  demand & supply of 2 currencies
Q24) Since there is a time value to money, the spot exchange rate of a currency is always lower
than the forward exchange rate.
1.   true
2.  false
3.  FALSE
4.  FALSE
Q25) When the dollar rises in value relative to a foreign currency, the current assets and current
liabilities of a U.S. foreign subsidiary increase in dollar value.
1.  true
2.   false
3.  FALSE
4.  FALSE
1.  Tea
2.  Rice
3.  Spices
4.   Cotton
Q27) what is a tariff?
1.  a tax on imported goods and services
2.  a tax on exported goods and services
3.  a tax on re exported goods and services
4.   all of these
1.  India
2.  UK
3.   USA
4.  Japan
1.   high
2.  low
3.  high & low
4.  depends on the currencies
Q30) _______ is also called aftermarket
1.   money market
2.  capital market
3.  primary market
4.  secondary market
1.  TRIPS
2.  TRIMS
3.   GATS
4.  TCA
Q32) What is the percent of foreign trade in GDP of India in 2010?
1.   25.0
2.  45.0
3.  55.0
4.  35.0
Q33) __________ is arrangement that is terminated before it matures
1.  replacement swap
2.   catastrophe swap

3.  non deliverable swap
4.  credit default swap
Q34) Which of the following statements is FALSE regarding the role of the customs agency of a
government?
1.  It deals with smuggling operations
2.   It is increasingly involved in helping protect against foreign terrorist attacks.
3.  It deals with the administration of certain navigation laws and treaties.
4.  It approves and declines migrant work visas.
Q35)
I. 3 parties
II. 5 parties
III. 4 parties
IV. 2 parties
1.  I & IV
2.  Only I
3.   I & II
4.  I & III
Explanation:-
2.   Indirect rates
3.  Direct rates
4.  USD
Q37) What is the highest level of Economic Integration?

1.  Custom Union
2.  Common Market
3.   Political Union
4.  Economic Union
Q38) Shipments from which country should be declared by EP forms?
1.  sri lanka and china
2.  afganistan and pakistan
3.   pakistan and china
4.  bangladesh and china
Q39) CIF stands for
1.   cost, insurance, freight
2.  Cost, income, freight
3.  Cost, interest, freight
4.  Customs, insurance, freight
Q40) Long term securities of two currencies is called as
1.  Euro bond
2.  Dual currency bonds
3.   Foreign bonds
4.  Euro dollar deposit
1.   crawling peg
3.  currency peg
1.  Trade fair authority of India
2.  Export Credit Guarantee Corporation of India

3.   Federation of Indian Exporters Organization
Q43) who is the director of WTO?
1.  Christina lagarde
2.  janet yellon
3.   ben banarke
4.  Roberto azevedo
Q44) In India, exports and Imports come under the purview of
1.  Ministry of Finance
2.  Ministry of Commerce
3.   Ministry of External Affairs
4.  Ministry of Home Affairs
Q45) what is IEC number?
1.  importer exporter code
2.  import excise code
3.   international export code
4.  international excise code
Q46) the date of settlement in a foreign exchange transaction is known as
1.   clearing date
2.  maturity date
3.  value date
4.  transaction date
Q47) Determination of forward rates is explained by
1.   Purchasing power parity theory
2.  Demand and Supply for spot currency
3.  Uncovered
Submitinterest
Test arbitrage Get Govt. Certi ed
Q48) Difference between buying and selling rates in an exchange rate or interest rate quotation is
known as
1.  Strike price
2.   Swap points
3.  Spread
4.  Spot rate
Q49) What two economic factors re ect the attractiveness of a country as a potential market for
investment?
1.   Political stability and a positive trade balance.
2.  Industrial structure and income distribution.
3.  Positive trade balance and industrial structure.
4.  Industrial structure and political stability.
Q50) What is de ned as an “isolated, enclosed, and policed area, operated as a public utility, in or
adjacent to a port of entry, furnished with facilities for lading, unlading, handling storing,
manipulating, manufacturing, and exhibiting goods, and reshipping them by land, water, or air”?
1.  Customs Warehouse
2.  Brokerage and Bonding Facility
3.  Free Trade Zone
4.   Manufacturing Facility
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Q1) what is the full form of CNF?
1.  carriage not found
2.  cost not found
3.  carriage and frieght
4.  cost and frieght
Q2) The spot rate is simply the exchange rate between two currencies as determined by the
respective governments.
1.  false
2.  true
Q3) what is a commercial invoice?
1.  document containing information about goods
2.  document containing payment
3.  document containing cost of goods
Q4) This is a type of foreign exchange account
1.  NOSTRO
2.  VOSTRO
3.  LORO
4.  all of these
3.  includes freight charges up to the port of unloading
Q6) CCIE stands for
2.  Commissioner of Central Imports and Exports
Q7) Foreign currency exposures can be avoided by
1.  Entering into forward contracts
2.  Denominating the transaction in domestic currency
3.  Exposure netting
4.  Maintaining foreign currency accounts

Q8) Which of the following is central nodal agency for implementing the price support operations
for commercial crops in India?
1.  NABARD
2.  FCI
3.  NAFED
4.  TRIFED
Q9) What is the maximum commission that an exporter can pay to his agent as per FEMA
guidelines
1.  0.1
2.  0.125
3.  0.15
4.  0.2
Q10) long term securities are sold & bought in
1.  money market
2.  primary market
3.  secondary market
4.  capital market
Q11) what is a tariff?
1.  a tax on imported goods and services
2.  a tax on exported goods and services
3.  a tax on re exported goods and services
4.  all of these
Q12) The bond markets are
1.  easily the most widely followed nancial markets in the United States
2.  the markets where foreign exchange rates are determined
3.  the markets where interest rates are determined
4.  the markets without risk
Q13) The existence of which type of dumping most likely constitutes the weakest argument for
Submit
the imposition of anTest
antidumping duty? Get Govt. Certi ed
1.  Predatory dumping
2.  Persistent dumping
3.  Sporadic dumping
4.  None of the - predatory, persistent, and sporadic dumping all generate equivalent-strength
arguments for the imposition of an antidumping duty
Q14) SITUATION: You were just noti ed by your customer in Italy that there is a typing error
between the letter of credit and the commercial invoice for the order of wa e irons recently
shipped to him. You are concerned because this order represents the largest single order your
company has ever shipped internationally. On this particular order, you did not use a freight
forwarder because you felt that the expense would be too great on a order of this size. Instead,
you did the paperwork and arrangements yourself. What course of action might you take?
1.  Fly to Italy and meet with your customer and “straighten out” the problem.
2.  Call the customers authorities in Italy and then fax them the correct papers.
3.  Notify your international banker– the one who initiated the letter of credit– of the
problem and let the banker solve the problem.
4.  Call a local international freight forwarder who has local representation at the port of entry
in Italy and ask that their Italian person handle the problem.
Q15) Which of the following Price Indices of India is considered for measuring ‘Headline In ation’?
1.  GDP De ator
2.  CPI-AL/RL
3.  CPI-IW
4.  WPI
1.  high
2.  low
3.  high & low
3.  Direct ratesTest
Submit Get Govt. Certi ed
4.  USD
Q18) who issues the certi cate of inspection?
1.  export inspection council
2.  dgft
3.  ministry of trade
4.  DEA
Q19) A country should export only that product in which it got ___________ to get maximum gain?
1.  Absolute Advantage
2.  Comparative advantage
3.  Trade Surplus
Q20) in _____ unlike a typical currency swap where there is physical exchange of currency ows
1.  replacement swap
2.  catastrophe swap
3.  non deliverable swap
Q21) the strike price for an option is
1.  The price at which the option is auctioned
2.  The exchange rate which the currencies are agreed to be exchanged under the contract
3.  Lower of the market price and the agreed price
2.  Discrimination; an example of

2.  Joint venture.
4.  Exporting.
Q24) _______ is A customizable nancial instrument traded in the over-the-counter derivatives

market that enables insurers to guard against massive potential losses resulting from a major
natural disaste
2.  catastrophe swap
Q25) According to Fisher Effect
1.  Forward Premium for a currency indicates its appreciation in future
2.   Forward Premium for a currency indicates its depreciation in future
3.  Forward Rates and spot rates are not linked
4.  Forward Rates are based on expected future spot rates
1.  Euro bond
3.  Foreign bonds
Q27) The tenure of the Foreign Trade policy is
1.  1 yr
2.  5 yr
3.  2 yr
4.  7 yr Submit Test Get Govt. Certi ed
3.  Minimum; a reduction
Q29) Under which of these circumstances does product liability not apply
1.  in case of negligence
2.  in case of smuggling
3.  under the principle of strict liability
4.  under express/implied warranties
Q30) what came into existence under the Marrakesh Agreement?
1.  IMF
2.  WORLD BANK
3.  ICC
4.  WTO
Q31) Determination of forward rates is explained by
1.  Purchasing power parity theory
2.  Demand and Supply for spot currency
3.  Uncovered interest arbitrage
Q32) ______ is a particular type of swap designed to transfer the credit exposure of xed income
products between two or more parties
4.  credit default swap
Q33) What is the full form of DAT?

1.  delievered at terminal
2.  document added tax
3.  delivered at time
Q34) who issues IEC numbers?
1.  DGFT
2.  DEA
3.  RBI
4.  chief controller of importsand exports
Q35)
I. 3 parties
II. 5 parties
III. 4 parties
IV. 2 parties
1.  I & IV
2.  Only I
3.  I & II
4.  I & III
Explanation:-
1.  a form used by customs before goods can be exported
Submit
4.  a form Test ships
for selling Get Govt. Certi ed
government?
2.  It is increasingly involved in helping protect against foreign terrorist attacks.
Q38)
What are Incoterms?
Explanation:-
Q39) Exposed assets are those translated at
1.  Average rate
2.  Current rate
3.  Historical rate
4.  all of these
Q40) AWB is also known as?
1.  article without border
2.  article of billing
3.  air waybill
Q41) Which of the following is not a payment method in international trade ?
Submit Test
1.  prepayment Get Govt. Certi ed
2.  consignment
3.  factoring
4.  open account
Q42) If country A forms a customs union with country B, then
1.  Country B continues to get tariff revenue from country A's exports sent to B
2.  All new trade between countries A and B because of the union is known as "trade creation."
3.  The welfare of countries A and B must necessarily be enhanced, especially if A and B begin
to buy many items from each other that they used to buy from the "outside world."
4.  Countries A and B may especially bene t from the union if substantial economies of
scale exist in some of the A and B industries
Q43) Which of the following is the rate at which a banker is willing to buy foreign currency ?
1.  Spread Rate
2.  Cross Rate
3.  Offer Rate
4.  Bid Rate
1.  loans
1.  TRIPS
2.  TRIMS
3.  GATS
4.  TCA
1.  Trade fair authority of India
2.  Export Credit Guarantee Corporation of India

3.  Federation of Indian Exporters Organization
Q47) spot settlement happens on the date of transaction + __ days basis
1.  0.0
2.  1.0
3.  2.0
4.  3.0
Q48) _______ is a country or government's exchange-rate policy of pegging the central bank's rate
of exchange to another country's currency
1.  crawling peg
3.  currency peg
Q49) forward exchange rate is the rate today for exchanging one currency for another
1.  for immediate delivery
2.  at a speci c future date
3.  at a speci c location on a speci c future date
4.  at a speci c location for immediate delivery
Q50) what is the certi cate of origin?
1.  certicate that good have been delievered without damage
2.  certi acte that the shipment is authentic
3.  certi cate that goods being imported were produced in that country
4.  certi cate that goods being exported were produced in that country
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Q1) Which of the countries has adopted Euro?
1.  Britain
2.  Germany
3.  Denmark
4.  Sweden
Q2) The "optimum tariff rate" for a country is that rate which, assuming no retaliation,
Submitthe
1.  Maximizes country's terms of trade Get Govt. Certi ed
Test
2.  Maximizes the country's quantity of imports
3.  Maximizes the country's balance of trade
4.  Maximizes the country's welfare
1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q4) Since there is a time value to money, the spot exchange rate of a currency is always lower than
the forward exchange rate.
1.  true
2.  false
3.  FALSE
4.  FALSE
Q5) Which document speci es the name of the country where goods are produced
1.  Shipping Bill
2.  Packing Note
3.  Customs Invoice
4.  Certi cate of origin
Q6) The term 'counter-trade' is used to illustrate the situation whereby which of the following
economic exchanges occurs between countries?
1.  Direct exchange of goods for other goods instead of cash.
2.  Direct and indirect exchange of goods for other goods instead of cash.
3.  Contra-purchase.
4.  Indirect exchange of goods for other goods instead of cash.
Q7) Which is the largest port of India by volume of cargo handled?
1.  Kandla
2.  Mumbai
3.  Jawaharlal Nehru
4.  Manglore
1.  in ation
2.  national income
Q9) ______ is the most heavily traded currency in the foreign exchange market
1.  USD
2.  EUR
3.  GBP
4.  JPY
1.  Service Tax
2.  Excise Duty
3.  Custom Duty
4.  Income Tax
1.  DGFT
2.  DEA
3.  RBI

Q13) ___________ is a theory in which the interest rate differential between two countries is equal to
the differential between the forward exchange rate and the spot exchange rate.
1.  Interest rate parity
2.  Society for Worldwide International Financial Telecommunication
Q16) Which of the following is an example of a non-monetary barrier to international trade?
1.  Product Quality stipulation
2.  Excise Duty
3.  Import Duty
4.  Tariff
1.  loans

Q19) If two countries remove all tariffs on each other's products and establish a common set of
tariffs against the rest of the world, but take no further steps toward economic integration, these
two countries have formed
1.  A free-trade area
2.  A customs union
3.  A common market
4.  An economic union
Q20) ______ is not a type of settlement period
1.  SPOT
2.  FORWARD
3.  TOM
4.  None of these
1.  prepayment
2.  consignment
3.  factoring
4.  open account
Q22) MIGA stands for
1.  Mutual Interest Guaranteeing Agencies
2.  Multilateral Institutional and Government Agencies
3.  Multilateral Investment Guarantee Agency
4.  Mutual Institutional and Government Agencies
Explanation:-
The Multilateral Investment Guarantee Agency is an international nancial institution which

offers political risk insurance and credit enhancement guarantees. These guarantees help
investors protect foreign direct investments against political and non-commercial risks in
developing countries.
1.  a form used by customs before goods can be exported
4.  a form for selling ships
Q24) Other things equal, a larger share of a tariff is more likely to be "paid" by the foreign
exporting country B rather than the domestic importing country A if
1.  The supply curve of B's producers is very inelastic
2.  The supply curve of A's producers is very inelastic
3.  The demand curve of B's consumers is very elastic
4.  The demand curve of A's consumers is very inelastic
1.  First
2.  Second
3.  Fourth
4.  Seventh
3.  Direct rates
4.  USD
Q27) what is a bill of lading?
1.  documents mentioning objects of shipment
2.  none of the options

Submit mentioning
3.  documents Test date of shipping Get Govt. Certi ed
4.  documents mentioning all items mentioned have been shipped
Q28) ________ is usually located in another country that provides service for another bank
1.  foreign bank
2.  correspondent bank
3.  central bank
4.  world bank
Q29) IEC Number when alloted is valid for a period of
1.  2 years
2.  5 years
3.  10 years
4.  no expiry date
Q30) The member countries of WTO have moved a "Product Patent Regime" under
1.  TRIMs
2.  TRIPs
3.  SAPTA
4.  BoP
Q31) what Is a packing list also called?
1.  bill of export
2.  bill of exchange
3.  itemized list of articles
4.  bill of parcel
government?
2.  It is increasingly involved in helping protect against foreign terrorist attacks.
Q33) A foreign merchant who purchases the products from the manufacturer and sells them at a
pro t is called a
1.  customs agent.
2.  Distributor
3.  Sales Representative
4.  Commission Agent
2.  a refund on good imported
Q35) what is the full form of CCS?
1.  cash compensatory support
2.  cash cost withdrwal
3.  cost container ship
Q36) Which of the following is NOT an example of a non-tariff barrier to the free ow of goods and
services in accordance with comparative advantage?
1.  Import quotas
2.  Government procurement provisions that favor home products
3.  Speci c duty of $1.00 per unit on each imported item
4.  Voluntary export quotas (VERs)
Q37) simultaneous purchase & sale of foreign currency at different rates is called currency
1.  devaluation
2.  exchange
3.  valuation
4.  swap
Q38) The place where foreign exchange takes place in banks is known as
1.  dealing room
2.  trading room
3.  FX room
4.  all of these
1.  Time draft
2.  Sight draft
3.  Usance draft
4.  both a & b
Q43) An MNC's degree of translation exposure is dependent on the following
1.  The proportion of its business conducted by foreign subsidiaries
2.  The location of its foreign subsidiaries

3.  The accounting method that it uses
4.  All the three

natural disaste
Q45) the impact the foreign exchange rate has on a rm is known as
1.  business risk
2.  operating exposure
3.  translation exposure
4.  transaction exposure
4.  Exporting.
Q47) SDR stands for
1.  Speci c Drawing Rights
2.  Speci c Depository Rules
3.  Special Depository Rules
4.  Special Drawing Rights
Explanation:-
Special drawing rights (SDR) refer to an international type of monetary reserve currency
created by the International Monetary Fund (IMF) in 1969 that operates as a supplement to the
existing money reserves of member countries. Created in response to concerns about the
limitations of gold and dollars as the sole means of settling international accounts, SDRs
augment international liquidity by supplementing the standard reserve currencies.
An SDR is essentially an arti cial currency instrument used by the IMF, and is built from a
basket of important national currencies. The IMF uses SDRs for internal accounting purposes.
SDRs are allocated by the IMF to its member countries and are backed by the full faith and
credit of the member countries' governments. The makeup of the SDR is re-evaluated every ve
years. The current makeup on the SDR is represented by the following table:
Q48) CIF stands for
1.  cost, insurance, freight
Q49) Currency depreciation happens when
1.  the value of currency falls with respect to gold
2.  the value of currency rises with respect to gold
3.  the value of 1 currency falls relative to another currency
4.  the value of 1 currency rises relative to another currency
Q50) A bank account held in a foreign country by a domestic bank, denominated in the currency of
that country.
1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
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Q1) IEC Number when alloted is valid for a period of
1.  2 years
2.  5 years
3.  10 years
4.  no expiry date
Q2) how many types of letter of credits are their?
1.  5.0 Submit Test Get Govt. Certi ed
2.  3.0
3.  2.0
4.  1.0
Explanation:-
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be
received on time and for the correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover the full or remaining amount of the
purchase.
3.  pakistan and china
Q5) A letter of credit is issued by?
1.  your bank
2.  bank closest to you
3.  the buyers bank
4.  all of these
Q6) _______ is a participant of the foreign exchange market
1.  central bank
2.  hedgers
3.  speculators

4.  all of these
1.  GDP De ator
2.  CPI-AL/RL
3.  CPI-IW
4.  WPI
Q8) The endorsement of "Allowed to export under claim for excise rebate" on the ARE-1 form is
made by the
1.  Deck Sergeant
2.  Chief o cer
3.  DGFT
4.  Range supritendent
Q9) Exporting is limited to which sector of the following?
1.  Goods
2.  Service
3.  Both
Q10) what was indias rank in "trading across borders" that is released by the world bank?
1.  127.0
2.  130.0
3.  126.0
4.  135.0
3.  credit risk
Q12) what isSubmit

the fullTest
form of IGM? Get Govt. Certi ed
1.  international guidance manifest
2.  import general manifest
3.  international general manifest
4.  imort guidance manifest
Q13) CIF stands for
1.  cost, insurance, freight
Q14) SITUATION: You were just noti ed by your customer in Italy that there is a typing error
between the letter of credit and the commercial invoice for the order of wa e irons recently
shipped to him. You are concerned because this order represents the largest single order your
company has ever shipped internationally. On this particular order, you did not use a freight
forwarder because you felt that the expense would be too great on a order of this size. Instead,
you did the paperwork and arrangements yourself. What course of action might you take?
1.  Fly to Italy and meet with your customer and “straighten out” the problem.
2.  Call the customers authorities in Italy and then fax them the correct papers.
3.  Notify your international banker– the one who initiated the letter of credit– of the
problem and let the banker solve the problem.
4.  Call a local international freight forwarder who has local representation at the port of entry
in Italy and ask that their Italian person handle the problem.
2.  Avoid exchange risk
1.  false
2.  true
Q17) WTO isSubmit

a Test Get Govt. Certi ed
1.  multilateral trading system
2.  rati ed trading system
3.  ungrati ed trading system
4.  bilateral trading system
3.  credit risk
Q19) Which of the following are instruments of trade Policy?
1.  Tariffs
2.  Subsidies
3.  Import Quotas
4.  All of these
Q20) the value of SDR is
1.  equivalent to one US dollar
2.  based on value of gold
3.  based on basket of ve currencies
2.  Society for Worldwide International Financial Telecommunication

2.  Excise Duty
3.  Import Duty
4.  Tariff
Q24) _________ occurs when shareholders' ownership of the target company's shares are
exchanged for shares of the acquiring company as part of a merger or acquisition
1.  circus swap
3.  in ation swap
4.  stock swap
1.  Maximizes the country's terms of trade
1.  Warehousing before transportation

4.  obligates the importer's bank to honor a draft presented to it
Q28) All of the following are major type of indirect intermediaries except
1.  the export management company
2.  the export trading company
3.  export agents
4.  distributors
1.  circus swap
4.  stock swap
Q30) If a (large) country B puts an export tax on a good, and assuming that world demand for the
export from B is not perfectly inelastic, then, because of the tax, the price of the good in country B
will __________ and the price of the good on the world market __________.
1.  Increase; also will increase
2.  Increase; will decrease
3.  Decrease; will increase
4.  Decrease; also will decrease
Q31)
What is the latest UCP ?
1.  400
2.  300
3.  500
4.  600
Explanation:-
The Uniform Customs and Practice for Documentary Credits (UCP) is a set of rules on the
issuance and use of letters of credit. The UCP is utilized by bankers and commercial parties in
more than 175 countries in trade nance.
The ICC has developed and moulded the UCP by regular revisions, the current version being the
UCP600. Submit Test Get Govt. Certi ed
Q32) The pro t in foreign exchange is due to
1.  high volume of money
2.  pro t ratio of the exchange
Q33) In the large country case, the imposition of an import quota
1.  Will always produce a net loss for the imposing country
2.  Can result in a net gain for the importing country if the government employs an auction
quota system to allocate the restricted imports
3.  Will produce a net gain for the exporting country
4.  Will have no predictable effect on the exporting country
1.  crawling peg
3.  currency peg

natural disaste
1.  Time draft
2.  Sight draft
Submit
3.  Usance draftTest Get Govt. Certi ed
4.  both a & b
Q37) MIGA stands for
1.  Mutual Interest Guaranteeing Agencies
2.  Multilateral Institutional and Government Agencies
3.  Multilateral Investment Guarantee Agency
4.  Mutual Institutional and Government Agencies
Explanation:-
The Multilateral Investment Guarantee Agency is an international nancial institution which

offers political risk insurance and credit enhancement guarantees. These guarantees help
investors protect foreign direct investments against political and non-commercial risks in
developing countries.
Q38) In order to secure export payments against political and economic risks and get nancial
assistance from institutions, the exporter must register with
1.  Director General Of Foreign Trade (DGFT)
2.  Apparel Export Promotion Council (AEPC)
3.  Registration cum Membership Certi cate (RCMC)
4.  Export Credit and Guarantee Corporation (ECGC)
Q39) The imposition of an export tax by a home country will lead to __________ in home country
consumer surplus and will __________ in home country producer surplus.
1.  A decrease; also lead to a decrease
2.  A decrease; lead to an increase
3.  An increase; lead to a decrease
4.  An increase; also lead to an increase

Q41) Which of the following is not an assumption in comparative advantage trade theory?
1.  Only two contries and two goods
2.  Zero Transportation Cost
3.  Constant Returns to scale
4.  Countries must have common border
1.  loans
3.  Purchasing power parity
Q44)
What are Incoterms?
Explanation:-
reaches maturity
Submit
1.  basis Test
rate swap Get Govt. Certi ed
3. 
4.  reverse swap
Explanation:-
An accreting
principal swap

exchange
cross-currency
swap
contracts.
Q46) What is the full form of DAT?
1.  delievered at terminal
2.  document added tax
3.  delivered at time
2.  corporate
3.  exchange brokers
Q48) When conducting an analysis of the political and legal environments of a country, which of
the following issues would be included?
1.  1. Political stability 2. Economic stability 3. Monetary regulations 4. Attitudes towards

importation and exportation
2.  1. Political stability 2. Economic stability 3. Culture and religious issues 4. Attitudes

towards importation and exportation
3.  1. Political stability 2. Government bureaucracy 3. Monetary regulations 4. Attitudes

1.  in ation
Q50) If country A forms a customs union with country B, then
1.  Country B continues to get tariff revenue from country A's exports sent to B
2.  All new trade between countries A and B because of the union is known as "trade creation."
3.  The welfare of countries A and B must necessarily be enhanced, especially if A and B begin
to buy many items from each other that they used to buy from the "outside world."
4.  Countries A and B may especially bene t from the union if substantial economies of
scale exist in some of the A and B industries
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pro t is called a
2.  Distributor
Q2) how many countries signed the Marrakesh agreement ?

1.  123.0
2.  139.0
3.  141.0
4.  110.0
1.  high
2.  low
3.  high & low
3.  Direct rates
4.  USD
2.  corporate
3.  exchange brokers
Q6) Eurodollars are
1.  Currency
2.  Deposits
3.  Bonds
4.  Equity
Submit Test
Get Govt. Certi ed
1.  Tea
2.  Rice
3.  Spices
4.  Cotton
1.  circus swap
4.  stock swap
Q10) the value of SDR is
1.  equivalent to one US dollar
2.  based on value of gold
3.  based on basket of ve currencies
2.  Discrimination; an example of
Q12) the impact the foreign exchange rate has on a rm is known as
1.  business risk
Submitexposure
2.  operating Test Get Govt. Certi ed
3.  translation exposure
4.  transaction exposure
1.  First
2.  Second
3.  Fourth
4.  Seventh
Q14) In the large-country case, an export tax
1.  Leads to an increase in the price of the good in the importing country
2.  Leads to no change in the price of the good in the importing country
3.  Is absorbed totally by the exporting country
4.  Increases consumer welfare in both the exporting and the importing country
Q15) CCIE stands for
2.  Commissioner of Central Imports and Exports
1.  Custom Union
3.  Political Union
Q18) Which of the following is considered to be a positive dynamic effect of integration?
1.  Economies-of-scale effects
2.  Reduced customs costs
3.  Trade diversion
4.  Increased monopoly power of rms
Q19) The endorsement of "Allowed to export under claim for excise rebate" on the ARE-1 form is
made by the
1.  Deck Sergeant
2.  Chief o cer
3.  DGFT
4.  Range supritendent
1.  India
2.  UK
3.  USA
4.  Japan
Q21) When conducting an analysis of the political and legal environments of a country, which of
the following issues would be included?
1.  1. Political stability 2. Economic stability 3. Monetary regulations 4. Attitudes towards

importation and exportation
2.  1. Political stability 2. Economic stability 3. Culture and religious issues 4. Attitudes

3.  1. Political stability 2. Government bureaucracy 3. Monetary regulations 4. Attitudes

Q22) the maximum numer of nostro account that a nak can maintain is
1.  11.0
2.  15.0
3.  17.0

1.  USD/EUR
2.  USD/JPY
3.  JPY/EUR
4.  GBP/USD
Q24) foreign exchange is a ______ market
1.  globalised centralised
2.  global decentralised
3.  national centralised
4.  national decentralised
Q25) Joint venturing is a useful mechanism for entering foreign markets. Which of the following
best illustrates the concept of joint venturing?
1.  Management contracting arrangement to supply speci c technology or expertise.
2.  Entering foreign markets by joining with foreign companies to produce or markets a

product or service.
3.  License to use the manufacturing process, trademark, patents or trade secrets for a fee or
'royalty' payment.
4.  Agreement between organisations to supply one organisation's products into a new market.
1.  in ation
Q28) Major Korean international trading companies are part of the large Korean business groups
called
1.  sogo shosha.
2.  Kaizen
3.  maquiladora.
4.  chaebol
Q29) Which one of the following sets of countries contains only members of the European Union?
1.  France, Spain, Finland, United Kingdom
2.  Germany, Italy, Portugal, Norway
3.  Denmark, Greece, the Netherlands, Russia
4.  Belgium, Greece, Italy, Russia
Q30) A bank account held in a foreign country by a domestic bank, denominated in the currency of
that country.
1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
1.  forward rate
2.  offer rate
3.  bid rate
4.  sport rate
Q32) What is the percent of foreign trade in GDP of India in 2010?
1.  25.0
2.  45.0
3.  55.0
4.  35.0
Q33) Non-resident Bank Account refers to
1.  nostro account
Submit
2.  vostro Test
account Get Govt. Certi ed
3.  accounts opened in offshore centers
4.  foreign bank account
Q35) Translation exposure arises in respect of items translated at
1.  Average rate
2.  Current rate
4.  all of these
Q36) The role of a freight forwarder can include all of the following except:
1.  pre-shipping counseling
2.  production of the shipping documents
3.  negotiation of payment terms
4.  handling of credit transactions between banks
4.  iron and steel
1.  false
2.  true
1.  a direct selling
Submit strategy
Test Get Govt. Certi ed
Q40) In order to secure export payments against political and economic risks and get nancial
assistance from institutions, the exporter must register with
1.  Director General Of Foreign Trade (DGFT)
2.  Apparel Export Promotion Council (AEPC)
3.  Registration cum Membership Certi cate (RCMC)
4.  Export Credit and Guarantee Corporation (ECGC)
Q41) _________ is a hypothesis in international nance that suggests differences in nominal

interest rates re ect expected changes in the spot exchange rate between countries
2.  International Fisher Effect
1.  DGFT
2.  DEA
3.  RBI
2.  a refund on good imported
Q44) Which document speci es the name of the country where goods are produced
1.  Shipping Bill
2.  Packing Note
3.  Customs Invoice
4.  Certi cate of origin
Q45) ask quote is for
1.  seller
2.  buyer
3.  hedger
4.  speculator
Q46) ______ is the most heavily traded currency in the foreign exchange market
1.  USD
2.  EUR
3.  GBP
4.  JPY
1.  crawling peg
3.  currency peg
Q48) spot exchange rate is the rate today for exchanging one currency for another
1.  for immediate delivery
2.  at a speci c future date
1.  Service Tax
2.  Excise Duty
3.  Custom Duty
4.  Income Tax
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Q1) The current account of balance of payments include
1.  Trade in services
2.  Income on investments
3.  Trade in goods
4.  all of these
Q2) Which are the four BRIC countries that are expected to become larger forces in the global
economy?
1.  Brazil, Russia, India, China
2.  Brazil, Russia, Iran, China
3.  Brazil, Russia, India Chile
4.  Brazil, Russia, Iraq, China
1.  high
2.  low
3.  high & low
Q5) Eurodollars are
1.  Currency
2.  Deposits
3.  Bonds
4.  Equity
Q6) indian currency is a
1.  free oating currency
2.  managed oating currency
3.  xed exchange currency
1.  Euro bond

1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q9) India is a member of which of the following Trade Associations?
1.  ANDEAN
2.  ASEAN
3.  APEC
4.  SAARC
Q10) ________ allow investors to mitigate the original risk that they are exposed to upon entering a
swap,
2.  reverse swap
Q11) Increase in the dollar price of a foreign currency usually
1.  bene ts U.S. importers
2.  bene ts U.S. exporters
3.  bene ts both U.S. importers and exporters
4.  harms both U.S. importers and exporters
Submita Test
3.  Minimum; reduction Get Govt. Certi ed
Q13) who is the director of WTO?
1.  Christina lagarde
2.  janet yellon
3.  ben banarke
4.  Roberto azevedo
the imposition of an antidumping duty?
3.  pakistan and china
Q16) The bank which nally collects the documents and claims reimbursement is called
1.  advising bank
2.  con rming bank
3.  paying bank
4.  negotiating bank
Q17) what is IEC number?
1.  importer exporter code
2.  import excise code
3.  international export code
4.  international excise code

1.  GDP De ator
2.  CPI-AL/RL
3.  CPI-IW
4.  WPI
Q19) What is de ned as an “isolated, enclosed, and policed area, operated as a public utility, in or
adjacent to a port of entry, furnished with facilities for lading, unlading, handling storing,
manipulating, manufacturing, and exhibiting goods, and reshipping them by land, water, or air”?
1.  Customs Warehouse
2.  Brokerage and Bonding Facility
3.  Free Trade Zone
4.  Manufacturing Facility
4.  obligates the importer's bank to honor a draft presented to it
Q21) can 2 IEC be issued against one PAN card?
1.  yes
2.  depends on IEC
3.  maybe
4.  no
Submit purchase
Q23) simultaneous Test Get Govt.
& sale of foreign currency Certi ed rates is called currency
at different
1.  devaluation
2.  exchange
3.  valuation
4.  swap
4.  Exporting.
Q25) _________ occurs when shareholders' ownership of the target company's shares are
exchanged for shares of the acquiring company as part of a merger or acquisition
1.  circus swap
3.  in ation swap
4.  stock swap
3.  credit risk
Q28) The number of copies of the ARE-1 forms to be made are
1.  3.0
2.  4.0
3.  5.0
4.  6.0
1.  DGFT
2.  DEA
3.  RBI
1.  India
2.  UK
3.  USA
4.  Japan
3.  Purchasing power parity
1.  prepayment
2.  consignment
3.  factoring
4.  open account
Q33) The apex body of the Foreign Trade is
1.  The Central Government
2.  The Ministry of Commerce
3.  The State Government

4.  all of these
Q34) Which among the following is the largest food item imported by India?
1.  Milk and diary products
2.  Meat
3.  Vegetable Oils
4.  Food Grains
1.  Maximizes the country's terms of trade
Q37)
What are Incoterms?
Explanation:-
Q38) Which of these accurately describes CIF

1.  FOB+Shipping +Freight+Insurance
2.  A + unloading
3.  B + customs charges
4.  C + transport to importers surroundings
Q39) Most currency transactions are channeled through the worldwide
1.  interbank market
2.  spot market
1.  TRIPS
2.  TRIMS
3.  GATS
4.  TCA
Q41) ask quote is for
1.  seller
2.  buyer
3.  hedger
4.  speculator
Q42) if purchasing power parity holds
1.  The nominal exchange rate will not change
2.  The real exchange rate will not change
3.  Both real and nominal exchange rates will not change
4.  Both real and nominal exchange will move together
Q43)
Which is the largest country by total international trade?

1.  JAPAN
2.  CHINA
3.  EU
4.  USA
Q44) what is the full form of APEC?
1.  asia pan economic convention
2.  asia paci c economic cooperation
3.  asia pan economic cooperation
4.  asia paci c economic convention
Q45) who issues the certi cate of inspection?
1.  export inspection council
2.  dgft
3.  ministry of trade
4.  DEA
Q46) If a (large) country B puts an export tax on a good, and assuming that world demand for the
export from B is not perfectly inelastic, then, because of the tax, the price of the good in country B
will __________ and the price of the good on the world market __________.
1.  Increase; also will increase
2.  Increase; will decrease
3.  Decrease; will increase
4.  Decrease; also will decrease
Q47) In the large country case, the imposition of an import quota
1.  Will always produce a net loss for the imposing country
2.  Can result in a net gain for the importing country if the government employs an auction
quota system to allocate the restricted imports
3.  Will produce a net gain for the exporting country
4.  Will have no predictable effect on the exporting country
Q48) Currency depreciation happens when
1.  the value of currency falls with respect to gold

2.  the value of currency rises with respect to gold
3.  the value of 1 currency falls relative to another currency
4.  the value of 1 currency rises relative to another currency
called
1.  sogo shosha.
2.  Kaizen
3.  maquiladora.
4.  chaebol
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Q1) The pro t in foreign exchange is due to
1.  high volume of money
2.  pro t ratio of the exchange
Q2) balance of trade is given by which equation?
1.  X+MSubmit Test Get Govt. Certi ed
2.  X-M
3.  X*M
4.  M-X
1.  Custom Union
Q5) The ______ is a public nancial market in which nancial instruments or commodities are
traded for immediate delivery.
2.  spot market
Q6) it is a _______ quotation if the foreign currency is in xed form & the local currency is in
variable form
1.  indirect
2.  direct
3.  local form
4.  foreign form
Q7) what is a bill of lading?
1.  documents mentioning objects of shipment
2.  none of the options

3.  documents mentioning date of shipping
4.  documents mentioning all items mentioned have been shipped
1.  Tea
2.  Rice
3.  Spices
4.  Cotton
Q9) Which one of the following sets of countries contains only members of the European Union?
1.  France, Spain, Finland, United Kingdom
2.  Germany, Italy, Portugal, Norway
3.  Denmark, Greece, the Netherlands, Russia
4.  Belgium, Greece, Italy, Russia
Q10)
I. 3 parties
II. 5 parties
III. 4 parties
IV. 2 parties
1.  I & IV
2.  Only I
3.  I & II
4.  I & III
Explanation:-
Q11) FOB stands for
Submit
1.  Future Test
on board Get Govt. Certi ed
2.  Flexible on board
3.  Free on board
4.  Freight on board
Explanation:-
Contracts involving international transportation often contain abbreviated trade terms that
describe matters such as the time and place of delivery, payment, when the risk of loss shifts
from the seller to the buyer, and who pays the costs of freight and insurance. The most
common international trade terms are Incoterms, which the International Chamber of
Commerce publishes, but rms that ship goods in the United States must also adhere to the
Uniform Commercial Code. Since there is more than one set of rules, the parties to a contract
must expressly indicate which governing laws they used for a shipment.
FOB is a trade term indicating whether the seller or the buyer is liable for goods that are
damaged or destroyed during shipping.
FOB terms affect the buyer's inventory cost; adding liability for shipped goods increases
inventory costs and reduces net income.
FOB contracts have become more sophisticated in response to the increasing complexities
of international shipping.
Q12) what is the full form of FTZ?
1.  free trade zone
2.  free transaction zone
3.  frieght trade zone
4.  free tax zone
Q13) _______ is a country or government's exchange-rate policy of pegging the central bank's rate
of exchange to another country's currency
1.  crawling peg
3.  currency peg
Submit
Q14) In India, Test
exports Getpurview
and Imports come under the Govt. Certi
of ed
1.  Ministry of Finance
2.  Ministry of Commerce
3.  Ministry of External Affairs
4.  Ministry of Home Affairs
Q16) What is MATES reciept?
1.  document of title issued as an interim measure until a proper bill of lading is issued.
2.  document signed by an o cer of a vessel evidencing reciept of shipment
3.  document signed by an o cer of a vessel evidencing departure of shipment
1.  USD/EUR
2.  USD/JPY
3.  JPY/EUR
4.  GBP/USD
swap,
2.  reverse swap
Q19) For which of the following goods Import and export in India is not banned?
1.  Narcotic Drugs
2.  Pornographic Material
3.  Indian Coins
4.  Ammunation
Q20) how many countries signed the Marrakesh agreement ?
1.  123.0
2.  139.0
3.  141.0
4.  110.0
Q21) A country should export only that product in which it got ___________ to get maximum gain?
1.  Absolute Advantage
2.  Comparative advantage
3.  Trade Surplus
Q22) Eurodollars are
1.  Currency
2.  Deposits
3.  Bonds
4.  Equity
Q23) can 2 IEC be issued against one PAN card?
1.  yes
2.  depends on IEC
3.  maybe
4.  no
1.  India
2.  UK
3.  USA
4.  Japan
Q25) A foreign currency swap is simply an agreement between two parties to exchange one
currency for another at a yet-to-be-determined future date but at a speci ed exchange ratio
1.  true
2.  false
3.  FALSE
4.  FALSE
1.  forward rate
2.  offer rate
3.  bid rate
4.  sport rate
4.  iron and steel
1.  First
2.  Second
3.  Fourth
4.  Seventh
1.  high
2.  low
3.  high & low
Q30) re ection of a nostro

Submit Test account is known as ________
Get Govt.account
Certi ed
1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q31) Joint venturing is a useful mechanism for entering foreign markets. Which of the following
best illustrates the concept of joint venturing?
1.  Management contracting arrangement to supply speci c technology or expertise.
2.  Entering foreign markets by joining with foreign companies to produce or markets a

product or service.
3.  License to use the manufacturing process, trademark, patents or trade secrets for a fee or
'royalty' payment.
4.  Agreement between organisations to supply one organisation's products into a new market.
3.  Direct rates
4.  USD
1.  Service Tax
2.  Excise Duty
3.  Custom Duty
4.  Income Tax
Submit Test
1.  Warehousing before transportation Get Govt. Certi ed
Q36) The argument that a tariff can provide temporary protection to an industry so that the
industry can expand, realize economies of scale, and eventually become an export industry is
known as the
1.  Antidumping argument
2.  National defense argument
3.  Infant industry argument
4.  Terms of trade argument
Q37) what are export promotion councils?
1.  helps promote and develop export
2.  helps promote imports
3.  helps to promote competiveness
4.  helps promote democracy
Explanation:-
Export promotional Councils
(EPC) are authorities which are basically

promoting
, supporting and assisting rms in entering the International markets and realising their
optimum potential from given resources.
called
1.  sogo shosha.
2.  Kaizen
3.  maquiladora.
4.  chaebol

1.  in ation
Q40) WTO is a
1.  multilateral trading system
2.  rati ed trading system
3.  ungrati ed trading system
4.  bilateral trading system
reaches maturity
3. 
4.  reverse swap
Explanation:-
An accreting
principal swap

exchange
cross-currency
swap
contracts.
Q42) LindahlSubmit
model Test Getfollowing
does not focus on which of the Govt. Certi ed
problems?
1.  Extent of state activity
2.  Allocation of the total expenditure among various goods and services
3.  Allocation of tax burden
4.  States Debt
Q43) The _____ is the informal over-the-counter nancial market by which contracts for future
delivery are entered into.
2.  spot market
3.  forward market
2.  Excise Duty
3.  Import Duty
4.  Tariff
Q47) What is the maximum duration for the exporter, to be obliged, to give the duplicate copy of
GR Form
1.  7 days
2.  14 days
3.  21 days
4.  30 days
Q48) The bank which nally collects the documents and claims reimbursement is called
1.  advising bank
2.  con rming bank
3.  paying bank
4.  negotiating bank
Q50) Purchasing-power parity implies that a standardized good should sell for the same price
internationally after adjusting for exchange rates.
1.  false
2.  true
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Q1) The _____ is the informal over-the-counter nancial market by which contracts for future
delivery are entered into.
2.  spot market
3.  forward market
Q2) when is pro forma invoice issued?

1.  when the bank approves it
2.  whenever you can pay for it
3.  before the L/C is sent
4.  all of these
Q3) The bond markets are
1.  easily the most widely followed nancial markets in the United States
2.  the markets where foreign exchange rates are determined
3.  the markets where interest rates are determined
4.  the markets without risk
1.  Custom Union
Q5) The apex body of the Foreign Trade is
1.  The Central Government
2.  The Ministry of Commerce
3.  The State Government
4.  all of these
1.  prepayment
2.  consignment
3.  factoring
4.  open account

Q8) What is the maximum duration for the exporter, to be obliged, to give the duplicate copy of GR
Form
1.  7 days
2.  14 days
3.  21 days
4.  30 days
reaches maturity
3. 
4.  reverse swap
Explanation:-
An accreting
principal swap

exchange
cross-currency
swap
contracts.
Q10) Translation exposure arises in respect of items translated at
1.  Average rate
2.  Current rate
4.  all of these
Q11)
I. 3 parties
II. 5 parties
III. 4 parties
IV. 2 parties
1.  I & IV
2.  Only I
3.  I & II
4.  I & III
Explanation:-
the imposition of an antidumping duty?
Q13) what is a consular invoice?
1.  gives declaration date of arrival of shipment
2.  gives declaration of true value of goods shipped
3.  gives declaration of contents of the shipment
Explanation:-
A consular invoice is a document certifying a shipment of goods and shows information such
as the consignor, consignee and value of the shipment.
3.  credit risk
Q15) What is the maximum commission that an exporter can pay to his agent as per FEMA
guidelines
1.  0.1
2.  0.125
3.  0.15
4.  0.2
Q16) MIGA covers risk of
1.  transfer restriction
2.  breach of contract
3.  expropriation
4.  all of these
pro t is called a
2.  Distributor
swap,

2.  reverse swap
1.  Euro bond
Q21) Under International strategy, rms try to create value by transferring _____________to foreign
markets where indigeneous competitors lack these skills and products.
1.  Valuable Skills and products
2.  Valulable Skills
3.  Products
4.  Core Architecture
Explanation:-
International business strategy refers to plans that guide commercial transactions taking place
between entities in different countries. Typically, international business strategy refers to the
plans and actions of private companies rather than governments; as such, the goal is
increased pro t.

Q23) In 2015 RBI agreed to do away with which form?
1.  SDF
2.  GAD
3.  EPC
4.  IGM
1.  Time draft
2.  Sight draft
3.  Usance draft
4.  both a & b
Q25) Other things equal, a larger share of a tariff is more likely to be "paid" by the foreign
exporting country B rather than the domestic importing country A if
1.  The supply curve of B's producers is very inelastic
2.  The supply curve of A's producers is very inelastic
3.  The demand curve of B's consumers is very elastic
4.  The demand curve of A's consumers is very inelastic
Q26) Which IncoTerm includes the price of rail transport to port (including insurance) and getting
goods upto the ship
1.  Ex works
2.  Free Carrier
3.  Free alongside ship
4.  Free on board

1.  Service Tax
2.  Excise Duty
3.  Custom Duty
4.  Income Tax
Q29) When exporter avails post-shipment credit in foreign country, what is taken as the
benchmark for the interest rate
1.  Benchmark Lending Rate
2.  MIBOR
3.  LIBOR
4.  Indian Bank Rate
Q30) Translation loss is
1.  loss to the parent company
2.  loss to the subsidiary company
3.  A notional loss
4.  An actual loss.
Q31) _________ are the exchange of one set of cash ows (based on interest rate speci cations) for
another
2.  reverse swap
3.  interest rate swap
Q32) ______ is not a type of settlement period
1.  SPOT
2.  FORWARD
3.  TOM
Q35) it is a _______ quotation if the foreign currency is in xed form & the local currency is in
variable form
1.  indirect
2.  direct
3.  local form
4.  foreign form
Q36) cash arbitrage explains the determination of
1.  Forward Rates for currencies
2.  Spot rates for currencies
3.  Both forward and spot rates for currencies
4.  Penalty for non-execution of forward contracts
1.  TRIPS
2.  TRIMS
3.  GATS
4.  TCA
Q38) A letterSubmit Test

of credit is issued by? Get Govt. Certi ed
1.  your bank
2.  bank closest to you
3.  the buyers bank
4.  all of these
Q39) forward premium depends on
1.  currency uctuation
2.  stock market returns
3.  interest rate differential between 2 countries
4.  demand & supply of 2 currencies
Q40) This is a type of foreign exchange account
1.  NOSTRO
2.  VOSTRO
3.  LORO
4.  all of these
1.  NOSTRO
2.  VOSTRO
3.  MIRROR
4.  LORO
Q42) The presence of an export subsidy (assuming that foreign demand is not perfectly- inelastic)
1.  Will increase the price of the export good in the home market and decrease the well-
being of home consumers
2.  Will decrease the price of the export good in the home market and increase the well- being
of home consumers
3.  Will lead to a net gain in welfare in the home country since producer surplus is enhanced
4.  Can lead to a higher import price in the importing country in the large-country case
Q43) The United States now gives China permanent most-favored-nation (MFN) treatment [or
normal trade relations (NTR)]. This means that the tariff schedules applicable to U.S. imports from
China
1.  Have lower tariff rates than the rates applicable to other countries to which the United
States grants permanent MFN treatment
2.  Have the same tariff rates as the rates applicable to other countries to which the United
States grants permanent MFN treatment
3.  Have lower tariff rates than the rates applicable to any other country sending goods to the
United States
4.  Have tariff rates of zero percent
Q44) Since there is a time value to money, the spot exchange rate of a currency is always lower
than the forward exchange rate.
1.  true
2.  false
3.  FALSE
4.  FALSE
Q46) An MNC's degree of translation exposure is dependent on the following
1.  The proportion of its business conducted by foreign subsidiaries
2.  The location of its foreign subsidiaries
3.  The accounting method that it uses
4.  All the three
Q47) indirect rate means
1.  The rate quoted with the units of home currency kept xed
2.  The rate quoted with units of foreign currency kept xed
3.  The rate quoted in terms of a third currency
Q48) forward exchange rate is the rate today for exchanging one currency for another
1.  for immediate delivery
2.  at a speci c future date
Q49) _____ is also called cash market
2.  spot market
Q50) how many types of letter of credits are their?
1.  5.0
2.  3.0
3.  2.0
4.  1.0
Explanation:-
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be
received on time and for the correct amount. In the event that the buyer is unable to make
payment on the purchase, the bank will be required to cover the full or remaining amount of the
purchase.
Next Test 
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26/04/2021 International Business MCQ with answers - Indiaclass
Home » International Business MCQ with answers
International Business MCQ With Answers

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If you are searching for International Business MCQ with answers, then you are at right place. This list of
International business MCQ for NET Exam, PG and Ph D entrance exam preparation will also help
students of other streams.
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Students and academicians of MBA, MMS, MCA, BBA, B. Com, BBA, PGDM and other management
courses and specialisations can take benefit of these international business management multiple
choice questions.
To see correct answers, please click on view answer button. Let’s start practicing these International
Business MCQs to score better.
International Business MCQ Set 1

IBRD stands for
a. International Board for Research and Development
b. International Bank for Reconstruction and Development
c. International Bank for Research Development


d. International Barrier For Reconstruction and Development
https://www.indiaclass.com/international-business-multiple-choice-questions/ 1/18
View Answer
b. International Bank for Reconstruction and Development
The first phase of globalization started around 1870 and ended with _______
a. World War I
b. World War II
c. The Establishment of GATT
d. In 1913 when GDP was High
Check correct answer
a. World War I
IBRD (International Bank for Reconstruction and Development) also known as
a. Exim Bank
b. World Bank
c. International Monetary fund
d. International Bank
b. World Bank
Ultimately ______ was replaced by the ______ on 1st Jan 1995
a. GATS, WTO
b. WTO, GATT
c. GATT, WTO 
d. IMF, GATT
c. GATT, WTO
Which is the right sequence of stages of Internationalization?
a. Domestic, Transnational, Global, International, Multinational
b. Domestic, International, Multinational, Global, Transnational
c. Domestic, Multinational, International, Transnational, Global
d. Domestic, International, Transnational, Multinational, Global
b. Domestic, International, Multinational, Global, Transnational
Subsidiaries consider the regional environment for policy / Strategy formulation is known as
______
SEE ALSO: Marketing 4.0 MCQ with Answers (Updated 2021)
a. Polycentric Approach
b. Regiocentric Approach
c. Ethnocentric Approach
d. Geocentric Approach
b. Regiocentric Approach
According to ______ the holdings of a country’s treasure primarily in the form of gold constituted
its wealth.

a. Gold Theory
b. Ricardo Theory
c. Mercantilism Theory
d. Hecksher Theory
c. Mercantilism
The Theory of Absolute Cost Advantage is given by ______
a. David Ricardo
b. Adam Smith
c. F W Taylor
d. Ohlin and Heckscher
b. Adam Smith
The Theory of Relative Factor Endowments is given by ______
a. David Ricardo
b. Adam Smith
c. F W Taussig
d. Ohlin and Hecksher
The theory of comparative cost advantage is given by ______ 

a. David Ricardo
b. Adam Smith
c. F W Taussig
a. David Ricardo
______ is the application of knowledge which redefines the boundaries of global business
a. Cultural Values
b. Society
c. Technology
d. Economy
c. Technology
International Business MCQs Set 2

Capitalistic, communistic and Mixed are the types of ______
a. Economic System
b. Social System
c. Cultural Attitudes
d. Political System
a. Economic System

______ is not an Indian Multinational Company
a. Unilever
b. Asian Paints
c. Piramal
d. Wipro
a. Unilever
Globalization refers to ______
a) Lower incomes worldwide
b) Less foreign trade and investment
c) Global warming and their effects
d) A more integrated and interdependent world
d) A more integrated and interdependent world
Which of the following is not a force in the Porter Five Forces model?
a. Buyers
b. Suppliers
SEE ALSO: MS Excel MCQ Questions And Answers
c. Complementary products
d. Industry rivalry


c. Complementary products
Comparative Cost Trade Theory is given by ______
a. Adam Smith
b. David Ricardo
c. Gottfried Haberler
d. Heckscher Ohlin
b. David Ricardo
________ is the payment method most often used in International Trade which offers the exporter
best assurance of being paid for the products sold internationally.
a. Bill of Lading
b. Letter of Credit
c. Open Account
d. Drafts
b. Letter of Credit
Key controllable factors in global marketing are ______
a. Government policy and legislation
b. social and technical changes
c. marketing activities and plans
d. all of the above.


c. marketing activities and plans
Select an example of Indian Multinational Company
a. Hindusthan Unilever
b. Videocon
c. Cargill
d. Tesco
b. Videocon
Multinational Corporations
________ corporation produces in the home country or in a single country and focuses on
marketing these products globally or vice a versa.
a. Global
b. International
c. Transnational
d. None of the above
a. Global
The ___________ company produces, markets, invests and operates across the world
a. Global
b. International
c. Transnational

d. Multinational
c. Transnational
IB MCQs Set 3
This is only a legal agreement and it is not an institution, but ______ is a permanent institution.
a. GATT, WTO
b. WTO, GATT
c.WTO, IMF
d. IMF, GATT
a. GATT, WTO
The WTO was established to implement the final act of Uruguay Round agreement of _______
a. MFA
b. GATT
c. TRIP’s
d. UNO
View Answer
b. GATT
WTO stands for ______
a. World technology association

SEE ALSO: WTO MCQ With Answers (Updated 2021)
b. World time organization
c. World trade organization
d. World tourism organization
View correct answer
c. World trade organization
NAFTA stands for ______
a. North African trade association
b. North American free trade agreement
c. Northern Atlantic trade agreement
d. Northern association for trade
b. North American free trade agreement
IPR stands for ______
a. Intellectual property rights
b. International property rights
c. Internal promotion rights
d. Interior promotional rights
a. Intellectual property rights
The main promoter of trade liberalization was ______ 

a. GATT
b. NAFTA
c. CEPTA
d. CISA
a. GATT
MNC Stands for ______
a. Multi-National Cooperation
b. Multi-National Corporation
c. Multi-National Company
d. Multi-National Collaboration
b. Multi-National Corporation
________ is the first step in the internationalization process.
a. License
b. Foreign Investment
c. Sales
d. Export
a. License
SMEs stands for ______ 

a. Small and Medium Entrepreneurs
b. Small Management of Enterprises
c. Small and Medium-sized Enterprises.
d. Societies for Managing Exports
c. Small and Medium-sized Enterprises.
The OECD stands for _______
a. Organization for Economic Co-operation and Development
b. Organization for Economic Coordination and Development
c. Organization for Environmental Cooperation and Development.
d. Organization for Environmental Control and Development
Answer: a. Organization for Economic Co-operation and Development
Reference Books
International Business, P Subba Rao, 2nd Enlarged Edition, Himalaya Publication.
26/04/2021 International Trade MCQ With Answers (Updated 2021) - Indiaclass
Home » International Trade MCQ With Answers (Updated 2021)
International Trade MCQ With Answers

(Updated 2021)
MCQ / By Admin
This post covers International Trade MCQ With Answers update in 2021. These MCQs will help students
of MBA, BBA, B Com, M Com, MMS, PGDM, and International Business specializations. These
International Trade multiple-choice questions can be used for competitive exams, entrance exams, SET,
NET & Ph D exams. This also focuses on MCQs on subtopics like foreign trade, multinational trade, and
Global trade.
_______is the oldest International Trade theory.
A. Country Similarity Theory
B. Theory of Absolute Cost advantage
C. Product Life Cycle Theory
D. Mercantilism Theory
View Answer
Domestic company limits it’s operations to ___________ political boundaries.
A. International
B. National
C. Transnational
D. Global
View Answer
B. National
https://www.indiaclass.com/international-trade-mcq/ 1/13
The international trade between ___________ has been described as a vast game of beggar my
neighbor.
A. Exporter & Importer
B. Two Countries
C. Two world wars
D. Country’s allies and enemies
View Answer
C. Two world wars
The abbreviation SAARC stands for _______
A. South American Association for Regional Cooperation
B. South African Association for Regional Cooperation
C. South ASEAN Association for Regional Cooperation
D. South Asian Association for Regional Cooperation
View Answer
D. South Asian Association for Regional Cooperation
International trade contributes and increases the world _________
A. Population
B. Inflation
C. Economy
D. Trade Barriers
View Answer
C. Economy
The ratio of trade to GDP was as high as _________ in 1913
A. 22.1
B. 11.2
C. 26.3
D. 33.2
View Answer
A. 22.1
________was replaced by World Trade Organization (WTO) on January 1, 1995.
A. NAFTA
SEE ALSO: Adam Smiths International Trade Theory of Absolute cost advantage
B. IMF
C. IRDB
D. GATT
View Answer
D. GATT
The full form of WTO is __________
A. World Tariff Organization
B. World Trade Organization
C. Western Trade Organization
D. World Transport Organization
View Answer
B. World Trade Organization
In International Trade, Full form of NAFTA is ___________.
A. National American Free Trade Agreement
B. North Asian Free Trade Agreement
C. New Anti-Tariff Free Trade Agreement
D. North American Free Trade Agreement
View Answer
D. North American Free Trade Agreement
AFTA is ___________.
A. ASEAN Free Trade Area
B. American Free Trade Area
C. Asian Free Trade Area
D. Agreement for Free Trade Area
View Answer
A. ASEAN Free Trade Area
Trade between two or more than two countries is known as ________.
A. Internal Business
B. External Trade
D. Unilateral Trade
View Answer
ASEAN stands for ___________.
A. The Association of Southeast American Nations
B. The Association of Southeast Asian Nations
C. The Agreement of Southeast American Nations
D. The Agreement of Southeast Asian Nations
View Answer
B. The Association of Southeast Asian Nations
__________was established by a multilateral treaty of 23 countries in 1947.
A. WTO
B. UN
C. GATT
D. NAFTA
View Answer
C. GATT (The General Agreement on Tariffs and Trade)
In International Trade, IMF stands for ___________.
A. International Monetary Fund
B. International Money Fund
C. International Market Fund
D. International Monetary Firm
View Answer
A. International Monetary Fund
An import tariff is a tax or duty levied on ___________ commodities.
SEE ALSO: International Marketing Question Papers
A. Imported
B. Exported
C. Transported
D. Both A & B
View Answer
A. Imported
An _____________ is a tax or duty levied on exported commodities.
A. Import Tariff
B. Export Tariff
C. Transport Tariff
D. Free Trade Tariff (FTT)
View Answer
B. Export Tariff
__________refers to purchase of goods from a foreign country.
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM Trade
View Answer
C. Import Trade
_______is a fixed percentage on the value of the traded commodity.
A. Anti dumping duty
B. Specific tariff
C. Ad Valorem tariff
D. A compound tariff
View Answer
C. Ad Valorem tariff
In most countries, foreign trade represents a significant share of ______
A. EXIM
B. FDI
C. Income Per Capita
D. GDP
View Answer
D. GDP
__________refers to the sale of goods to a foreign country
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM Trade
View Answer
B. Export Trade
Free international trade maximizes world output through________.
A. Countries reducing various taxes imposed.
B. Countries specializing in production of goods they are best suited for.
C. Perfect competition between countries and other special regions
D. The diluting the international business laws & conditions between countries.
View Answer
B. Countries specializing in production of goods they are best suited for.
________is a combination of an ad valorem and specific tariff.
A. Anti dumping tariff
B. Specified Valorem Tariff
C. EXIM Tariff
View Answer
Foreign trade is an exchange of capital, goods, and services across _________ borders or territories
SEE ALSO: International Marketing MCQ with Answers
A. Intranational
B. National
C. International
D. Both A & C
View Answer
C. International
_______ means goods are imported from one country and are exported to another country.
A. Third Party Trade
B. Entrepot trade
C. Export Trade
D. EXIM Trade
View Answer
B. Entrepot trade
This is all about MCQ on International Trade with solutions.
You’ll also like to READ:
INTERNATIONAL BUSINESS MCQ
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26/04/2021 MCQs on International Trade and Finance
Commerce (/commerce/) > Commerce MCQs (/commerce/commerce-mcqs/) > MCQ on International Trade and
Finance (/commerce/mcq-on-international-trade-and-finance/)
MCQs on International Trade and Finance
International trade nance comprises nancial instruments and products that facilitate
international trade. Following are some of the international trade and nance multiple
choice questions and answers that will help the students in brushing up their
understanding of the concept of international trade and nance.
1. Trade between two countries can be useful if cost ratios of goods are:
A. Undetermined
B. Decreasing
C. Equal
D. Different
Answer: D
2. The term Euro Currency market refers to
A. The international foreign exchange market
B. The market where the borrowing and lending of currencies take place outside the
country of issue
C. The countries which have adopted Euro as their currency
D. The market in which Euro is exchanged for other currencies
Answer: B
3. Which of the following theories suggests that rms seek to penetrate new markets
over time?
A.Imperfect Market Theory
B.Product cycle theory
C. Theory of Comparative Advantage
D. None of the above
Answer: B
4.Dumping refers to:
A. Reducing tariffs
B. Sale of goods abroad at low a price, below their cost and price in home market
C. Buying goods at low prices abroad and selling at higher prices locally
D. Expensive goods selling for low prices
Answer: B
5. International trade and domestic trade differ because of:
A. Different government policies
B. Immobility of factors
C. Trade restrictions
D. All of the above
Answer: D
6. The margin for a currency future should be maintained with the clearing house by
A. The seller
B. The buyer
C. Either the buyer or the seller as per the agreement between them
D. Both the buyer and the seller
https://byjus.com/commerce/mcq-on-international-trade-and-finance/ 1/6
26/04/2021 MCQs on International Trade and Finance
Answer: D
7.The following statement with respect to currency option is wrong
A.Foreign currency- Rupee option is available in India
B.An American option can be executed on any day during its currency
C.Put option gives the buyer the right to sell the foreign currency
D.Call option will be used by exporters
Answer: D
8. Govt. policy about exports and imports is called:
A. Commercial policy
B. Fiscal policy
C. Monetary policy
D. Finance policy
Answer: A
9.Which of the following is international trade:
A. Trade between countries
B. Trade between regions
C. Trade between provinces
D. Both (b) and (c)
Answer: A
10. Market in which currencies buy and sell and their prices settle on is called the
A.International bond market
B.International capital market
C.Foreign exchange market
D. Eurocurrency market
Answer: C
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26/04/2021 International Trade Related MCQs
EDUCATION CIRCLE SUBSCRIBE
International Trade Related MCQs

- September 26, 2018
1. Which of the following is international trade:

A. Trade between provinces B. Trade between regions
C. Trade between countries D. (b) and (c) of above
Answer: Option C
2. Theory of comparative advantage was presented by:

A. Adam Smith B. Ricardo
C. Hicks D. Arshad
Answer: Option B
3. Which is NOT an advantage of international trade:

A. Export of surplus production B. Import of defence material
C. Dependence on foreign countries D. Availability of cheap raw materials
Answer: Option C
4. If Japan and Pakistan start free trade, difference in wages in two countries will:
A. Increase B. Decrease
C. No effect D. Double
Answer B
5. Trade between two countries can be useful if cost ratios of goods are:
A. Equal B. Different
C. Undetermined D. Decreasing
Answer B
6. Modern theory of international trade is based n the views of:

A. Robbins and Ricardo B. Adam Smith and Marshall
C. Heckcsher and Ohlin D. Saleem and Kareem
Answer C
7. Foreign trade creates among countries:

A. Con icts B. Cooperation
C. Hatred D. Both (a) & (b)
Answer B
https://dharmendrakr2012.blogspot.com/2018/09/international-trade-related-mcqs-1.html 1/9
s e
8. Net exports equal:

A. Exports x Imports B. Exports + Imports
C. Exports - Imports D. Exports of services only

ANSWER C
9. A tariff:
A. Increases the volume of trade B. Reduces the volume of trade
C. Has no effect on volume of trade D. (a) and (c) of above
ANSWER B
10. A tariff is:

A. A restriction on the number of export rms B. Limit on the amount of imported goods
C. Tax and imports D. (b) and (c) of above
Answer:C
11.Dumping refers to:

A. Buying goods at low prices abroad and selling at higher prices locally B. Expensive
goods selling for low prices
C. Reducing tariffs D. Sale of goods abroad at low a price, below their cost and price in
home market
Ans D
12. According to Hecksher and Ohlin basic cause of international trade is:
A. Difference in factor endowments B. Difference in markets
C. Difference in political systems D. Difference in ideology
ANSWER A
13. All are advantages of foreign trade EXCEPT:

A. People get foreign exchange B. Nations compete
C. Cheaper goods D. Optimum utilisation of country's resources
ANSWER A
14. Two countries can gain from foreign trade if:

A. Cost ratios are different B. Tariff rates are different
C. Price ratios are different D. (a) and (c) of above
ANSWER D
15. International trade and domestic trade differ because of:

A. Trade restrictions B. Immobility of factors
C. Different government policies D. All of the above
ANSWER D
16 T ft d fd l i ti
https://dharmendrakr2012.blogspot.com/2018/09/international-trade-related-mcqs-1.html
ll f bl b 2/9
16. Terms of trade of developing countries are generally unfavourable because:
A. They export primary goods B. They import value added goods
C. They export few goods D. (a) and (b) of above
ANSWER D
17. Term of trade of a country show:

A. Ratio of goods exported and imported B. Ratio of import duties
C. Ratio of prices of exports and imports D. (a) and (c) of above
ANS C
18. In a free trade world in which no restrictions exist, international trade will lead to:
A. Reduced real living standard B. Decreased e ciency
C. Increased e ciency D. Reduced real GDP
ANSWER C
19. Govt. policy about exports and imports is called:

A. Monetary policy B. Fiscal policy
C. Commercial policy D. Finance policy
ANSWER C
20. What would encourage trade between two countries:
A. Different tax system B. Frontier checks
C. National currencies D. Reduced tariffs
ANS D
21."Terms of trade" between two countries refer to a ratio of:

A. Export prices to import prices B. Currency values
C. Exports to imports D. Balance of trade to balance of payments
#A
22. What would encourage trade between two countries?

A. Different tax system B. Quality control
C. Reduced tariffs D. Fixing import quotax
#C
23. It is drawback of protection:

A. Consumers have to pay higher prices B. Producerrs get higher pro ts
C. Quality of goods may be affected D. All of the above
#D
24. It is drawback of free trade:

A. Prices of local goods rise B. Government looses income from custom duties
C. National resources are underutilized D. (a) and (b) of above
#B
25. Gold standard means:

A. Currency of the country is made of gold B. Paper currency is not used
C. Currency of the country is freely convertible into gold D. (a) and (c) of above
#D
26. Terms of trade of a country:

A. Mean the trade agreement between trading countries B. Is another name of exchange
ratio of two currencies
C. Show the ratio between total export earnings and import bill of a country D. Are
determined by the price index of export and import goods
#D
27. Pakistan's terms of trade:

A. Have risen over past few years B. Have fallen over past few years
C. Always remain above 100 D. Are determined by federal govt.
#B
28. Exchange value of Pak rupee against other currencies has fallen because:
A. Our total exports are smaller B. Our imports are more than exports
C. Exports are more than imports D. Pakistan does not produce gold
#B
29. This is an advantage of foreign trade:

A. We can preserve our natural resources B. New technology comes to the country
C. People need not go abroad D. We can get foreign currencies
#B
30. This is NOT an advantage of foreign trade:

A. We can get gold from abroad B. New technology comes to the country
C. We can import goods which are in short supply in Pakistan D. We can made best use of
natural resources
#A
31.Foreign trade:
A. Increases employment opportunities B. Increases international mobility of labour
C. Increases competition D. All of the above
#D
32. Foreign trade:

A. Bene ts developed countries B. Bene ts underdeveloped countries
C. Bene ts democratic countries D. Bene ts all countries
#D
33. Foreign trade has the advantage:

A. Trading countries get foreign exchange B. Can import scarce raw materials
C. Can import machinery and technology D. (b) and (c) of above
#D
34. In foreign trade, Protection policy means:

A. Restrictions on exports B. Restriction on transfer of foreign exchange
C. Restrictions on imports D. All of the above
#C
35. If a country decreases the external value of its currency, it will affect:
A. Volume of exports B. Volume of imports
C. General price level D. All of the above
#D
36. The theory explaining trade between two countries is called:

A. Comparative advantage B. Comparative bargain
C. Comparative trade D. Comparative returns
#A
37. The theory explaining trade between two countries is called:

A. Comparative disadvantage theory B. Comparative cost theory
C. Comparative trade theory D. None of the above
#B
38. Trade between two countries takes place when:

A. Cost ratios of commodities are equal B. Cost ratios of commodities are different
C. Cost ratios of commodities are high D. Cost ratios of commodities are low
#B
39. David Ricardo presented the theory of international trade called:

A. Theory of absolute advantage B. Theory of comparative advantage
C. Theory of equal advantage D. Theory of total advantage
#B
40. Rich countries have de cit in their balance of payments:

A. Sometimes B. Never
C. Alternate years D. Always
#A
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26/04/2021 Textbook Solution

Login Account  Home / CBSE / 11 / Business Studies / International Business-II / Exercise

Chapter 12 : International Business-II

 EXERCISE: MULTIPLE CHOICE QUESTIONS 

Q2. Which of the following documents is not required in connection with an

Q5. Which one of the following is not a part of export documents?

https://www.intellify.in/Textbook/Solutions/CBSE/11/Business Studies/12/ 1/22

Q10. TRIP is one of the WTO agreements that deal with:

 EXERCISE: SHORT ANSWER QUESTIONS 

Q1. Discuss the formalities involved in getting an export licence.

https://www.intellify.in/Textbook/Solutions/CBSE/11/Business Studies/12/ 2/22

EXIM First 100mcqs - mcq on export procedure and

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MULTIPLE CHOICE QUESTIONS

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Multiple Choice Questions

d. Industries that sell to

Multiple Choice Questions

among each other. The first major

World Trade Organization

C.Smoot-Hawley anization Policy

Export-Import Procedure and Document

Multiple Choice Questions

31. risk is the potential

Export-Import Procedure and Documentation

Multiple Choice Questions

a. exporter agrees to ship under a letter of credit

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Multiple Choice Questions

Answer: c. The average well-being of people in both countries will increase.

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Export-Import Procedure and Documentation

Multiple Choice Questions

Both, the current account and capital account

C. Price ratios are different

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238 Export-Import Procedure and Documentation

Multiple Choice Questions

b. Export Credit Guarantee

Answer: C. Ministry of commerce in the year

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Multiple Choice Ques tions 241

 Vskills Practice Tests

Vskills Certi cations

Import Export Mock Test

Import Export Mock Test

Your Score 30.00%

15 of 50 questions are answered correctly

Q1) ___________theory focuses on the in ation – exchange rate relationship

1.  Interest rate parity

2.  International Fisher Effect

3.   Purchasing power parity

Q3) A price agreed on CIF basis

1.  does not include the freight charges

2.  includes freign charges up to the port of lading

3.   includes freight charges up to the port of unloading

4.  includes freight charges upto the importer's works

What are Incoterms?

1.  a set of terms for policy formulation