MCQ - International Business Management

INTERNATIONAL BUSINESS MANAGEMENT (306)
Multiple Choice Questions – External Examination

(I) Multiple Choice Questions:
1. IBRD (International Bank for Reconstruction and development) is also known as: -
A. Exim Bank
B. International Bank
C. World Bank
D. International Monetary Fund
ANSWER: C
2. Ultimately ----- was replaced by---- on 1st January 1995.

A. GATS, WTO
B. WTO, GATS
C. GATT, WTO
D. IMF, GATT
ANSWER: C
3. Which of the following is an advantage of turnkey projects?

A. Can earn a return on knowledge asset
B. Will not create a competitor
C. Tight control of operations
D. All the above
ANSWER: A
4. The mode of entry into international business with least risk to the firm is:
A. Indirect exports
B. Direct exports
C. Management contract
D. Contract Manufacturing
ANSWER 4: A
5. The following is an export intermediary:

A. Export house
B. Trading house
C. A manufacturing exporter
D. Merchant exporter.
ANSWER: C
6. Global companies can----------- its experience to expand its global operations.

A. Contract
B. Expand
C. Minimize
D. Leverage
ANSWER: D
7. Governmental regulations can affect the viability & ----------- of a company using the
internet as a foreign market entry mode.
A. effectiveness
B. association
C. performance
D. None of the above
ANSWER : A
8. typically offer more flexibility in international markets

A. SMEs
B. LSEs
C. MNEs
ANSWER : A
9. From the point of view of international business, an organization that enjoys competitive
advantage in an industry has done so by:
A. Focusing on long-term profit.
B. Charging lower prices than competition.
C. Creating superior value for customers.
D. Constantly enlarging its marketing activities.
ANSWER :C
10. The International Monetary Fund is important because:

A. It has sufficient financial resources to deal with a major global financial crisis.
B. It has sufficient financial resources to help individual countries facing balance of
payments problems.
C. Emerging economies can exercise significant influence on it.
D. It fixes exchange rates.
ANSWER : B
11. What one of the following is not the advantage of MNCs to the host country?
A. Increase in social activities
B. Increase in economic activities
C. Utilization of natural resource
D. R&D efforts enhanced.
ANSWER : A
12. Within an international context, what are 'economies of scope' synonymous with?
A. Reusing a resource from one business/country in additional businesses/countries.
B. Decreased cost per unit of output.
C. Buying components in a bulk.
D. Any of the above.
ANSWER : A
13. Which of the following could be defined as a multinational company?

A. A firm that owns shares in a foreign company but does not participate in the
company's decision making.
B. A UK based internet package holiday firm specializing in selling tours to Turkey
to German customers.
C. A firm owning a chain of supermarket outlets outside its country of origin.
D. A finance company transferring its HQ and all its activities from the UK to the US.
ANSWER :C
14. What functions do financial institutions traditionally perform?

A. They mobilize savings and investments.
B. They expand risk.
C. They spread risk.
D. They offer only short-term finance.
ANSWER : A
15. How does international law facilitate international trade and investment?
A. It makes it easier to resolve contract disputes for firms involved in internatio nal
trade and investment.
B. It allows business to choose the most favorable national legal system to instit ute
proceedings.
C. The terms used in international conventions are open to differing interpretations.
D. The Uniform Commercial Code favors big US multinationals.
ANSWER : A
16. Which of the following constitutes Foreign Direct Investment?

A. A speculator trying to make a profit by buying company shares on a foreign stock
exchange.
B. A UK energy company buying territory abroad where it expects to find oil reserves.
C. A tourist purchasing foreign currency to spend on a holiday abroad.
D. A company signing an agreement with a wholesaler to distribute its products in
foreign markets.
ANSWER : C
17. Trade Related Investment Measures (TRIMS) doesn’t apply for
A. Measures that affect trade in goods.
B. Measures that lead to restrictions in quantities.
C. Discouraging measures that limit a company’s imports.
D. Discouraging measures that limit a company’s exports.
ANSWER : B
18. General Agreement on Trade in Services will not be applicable to

A. Services supplied from one country to another – cross border supply
B. Transaction of goods across the border – Export Import
C. Individuals traveling from own country to supply services in another – presence of
natural persons.
D. Consumers/firms making use of a service in another country – consumption abroad.
E. Foreign company setting up subsidiary or branches to provide services in another
country –commercial presence.
ANSWER : B
19. As a part of WTO guidelines, Agreement on Agriculture (AOA) doesn’t consider

A. Direct payments to farmers are permitted.
B. Indirect assistance and support to farmers including R & D support by govt. are not
permitted.
C. Domestic policies which directly effect on production and trade have to be cut back.
D. Least developed countries do not need to make any cuts.
ANSWER : B
20. Quantitative restrictions refer to limit set by countries to curb

A. Measures that affect trade in goods.
B. Measures that lead to restrictions in quantities.
C. Discouraging measures that limit a company’s imports.
D. Discouraging measures that limit a company’s exports.
ANSWER . D
21. A Most Favored nation status doesn’t necessarily refers to

A. Same and equal economic treatment
B. Non-discriminatory treatment
C. Same tariff rates applicable
D. Uniform civil code
ANSWER : D
22. The world trade organization was formed in the year with GATT as it basis.
A. 1993
B. 1994
C. 1995
D. 1996
ANSWER : C
23. Which of the following is not an International Financial Institution?

A. ICICI
B. IMF
C. IDA
D. World Bank
ANSWER: A
24. What one of the following is not the advantage of MNCs to the host country?
A. Increase in social activities
B. increase in economic activities
C. Utilization of natural resource
D. R&D efforts enhanced.
ANSWER : A
25. The country that attract the largest FDI inflow is

A. India
B. China
C. USA
D. Brazil
ANSWER : A
26 Type of organization which has operating units in some foreign countries is classified as
A. alliance enterprise
B. global enterprise
C. interdependence enterprise
D. multinational enterprise
ANSWER: D
27 On the basis of the size and composition of external debt, world bank has classified India as a
A. heavily indebted country
B. .moderate indebted country
C. Less indebted country
D. Severely indebted country.
ANSWER: B
28 The balance of payments of a country on current account is equal to

A. Balance of trade plus short term
B. Balance of trade plus net invisible exports
C. Balance of payment minus capital flows
D. Balance of invisible trade plus imports
ANSWER: B
29 Which one is not an international organisation
A. SAARC
B. ASEM
C. ASEAN
D .CBDT
ANSWER: D
30 The main objective of International Monetary Fund (IMF) was to

A. Promote International trade
B. Help economically backward countries
C. Maintain stable exchange rates
D. Promote international liquidity
ANSWER: B
31 Which of the following is not an International Financial Institution

A. ICICI
B. IMF
C. IDA
D. World Bank
ANSWER:A
32 The gains from two nations depend on

A. Domestic barter rates
B. Different in the domestic barter rates of the two countries
C. Terms of trade
D. Degree of absolute advantage.
ANSWER: C
33 Interest payments on loans borrowed abroad are recorded in

A. Capital Account
B. Current Accounts
C. errors and Omission Section
D. Official Reserve Account
ANSWER:B
34 The world bank is known as

A. IMF
B. IDA
C. IBRD
D. Both (b) & (c)
ANSWER: C
35 Which one is not the form of FDI

A. Purchase of existing assets in foreign currency.
B. New Investment in Property, planet and equipment.
C. Making investment is the mutual funds
D. Transfer of many type of asset
ANSWER: A
UNIT-II
I Multiple Choice Questions:
1. Globalization refers to:
A. A more integrated and interdependent world
B. Less foreign trade and investment
C. Global warming
D. Lower incomes worldwide
ANSWER: A
2. Globalization is beneficial for firms because:
A. It protects them against foreign competition.
B. It cushions them from the effects of events in other countries.
C. It opens up new market opportunities.
D. It increases the risk and uncertainty of operating in a globalizing world economy.
ANSWER:C
3. The internet facilitates globalization by:
A. Making it more difficult to contact potential customers abroad.
B. Cutting the cost for firms of communicating across borders.
C. Making it harder to send money from one country to another.
D. Making it easier for governments to censor the information received by their
citizens from abroad.
ANSWER: B
4. Globalization can create problems for business because:
A. It can result in more competition.
B. It reduced vulnerability to political risk and uncertainty when operating abroad.
C. It means that they can increase prices.
D. All the options given are correct.
ANSWER: D
5. Which of the following do NOT facilitate globalization?
A. Improvements in communications
B. Removal of barriers to trade and investment
C. Immigration controls
D. Removal of controls on movement of capital across borders
ANSWER: C
6. Which of the following is NOT a business opportunity generated by globalization?
A. Access to low cost labour.
B. Cheap International transport.
C. Currency crises.
D. Less stringent regulation of the business environment.
ANSWER: C
7. With the globalization of markets, the tastes and preferences of consumers world-wide
are:
A. Becoming similar to the tastes and preferences of American consumers.
B. Converging upon a global norm.
C. So different that they can be ignored by international organizations.
D. Being encouraged by multinational organizations to become increasingly similar.
ANSWER : B
8. Which of the following is a driver of globalization?
A. Trade barriers and controls on inflows of foreign direct investment.
B. Weak competition.
C. Technological advance.
D. Economies of scale are being exploited to the maximum.
ANSWER : A
9. Which of the following is not a driver of globalization?
A. The fragmentation of consumer tastes between countries.
B. The competitive process.
C. Multinational companies successfully persuading governments to lower trading
barriers.
D. The need to gain economies of scale.
ANSWER : B
10. Firm that operate internationally are able to
A. earn a greater return from their skills and core competencies
B. realize location economies where they can be performed most efficiently
C. realize greater experience curve economies, which reduces the cost of production
D. All the above
ANSWER : D
11. In a global market place
A. the entire world is a market place87
B. national borders are irrelevant
C. the potential for organizations to grow expands dramatically
D. All of the above
ANSWER : D
12. In a global market place Managers must
A. deals with economic, political and cultural differences
B. expect competitors to suddenly appear at any time from any place
C. not to take specific differences of local environment into consideration
D. A and B
ANSWER : D
13. Which of the following is not true of changes in a firm's technological environment?
A. New technology allows for new ways of communicating with a firm's customers.
B. New technology always leads to benefits for firms.
C. New technology can allow new goods and. services to be developed.
D. New technology lowers the production learning curve.
ANSWER : B
14. Theory of Mercantilism propagates
A. Encourage exports and imports
B. Encourage exports and discourage imports
C. Discourage exports and imports
D. Discourage exports and encourage imports
ANSWER: B
15. Theory of international trade was given by:-
A. Adam Smith
B. Ricardo
C. Hicks
D. Ohlin
ANSWER : B
16. If Japan and Pakistan start free trade, cost of wages in two countries will
A. Increase
B. Decrease
C. No effect
D. Double
ANSWER : B
17. Trade between two countries can be useful if cost ratio of goods are
A. Equal
B. Different
C. Undetermined
D. Zero
ANSWER: B
18. Modern theory of international trade is based on the view of
A. Adam Smith
B. Ricardo
C. Hecksher and Ohlin
D. Hicks
ANSWER : C
19. A tariff:
A. Increases the volume of trade
B. Decreases the volume of trade
C. Has no effect on the volume of trade
D. Both (b) and (c)
ANSWER : B
20. A tariff is:
A. Restriction on the number of export firms
B. Limit on the amount of imported goods
C. Taxation on imports
D. (b) and (c) as mentioned above
ANSWER : C
21. According to Heckscher and Ohlin theory, what is considered in international Business?
A. Difference in factor endowments
B. Difference in markets
C. Difference in technology
D. Difference in ideology
ANSWER : A
22. Two countries can gain from foreign trade if
A. Cost ratios are different
B. Price ratios are different
C. Tariff rates are different
D. (a) and (b) above
ANSWER : D
23. 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
24. Terms of trade of developing countries are generally favourable because
A. They export primary goods
B. They import value added goods
C. They export few goods
D. Both (a) and (b)
ANSWER : D
25. Terms 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) as given above
ANSWER : C
26 When there are several projects are executing simultaneously, matrix organization allows a better
companywide
A. Balance of resources
B. Prioritized resources
C. Balanced capital
D. Unbalanced resources
ANSWER: A
27 An organization that does any semiformal risk management, fail to consider risks associated
with project?
A. Internal environment
B. External environment
C. Uncertain future
D. Market value
ANSWER: B
28 Anything outside a system (the project) that can affect or be affected by system, is known
as
A. Environment
B. Medium
C. Channel
D. Boundary matrix
ANSWER: A
29 Matrix form of organizations are
A. Cheap
B. Easy
C. Plain
D. Complex
ANSWER: D
30 Holistic approach of total organization needs allows projects to be staffed and scheduled in
order to
A. Replace System Performance
B. Minimize System Performance
C. Maximize System Performance
D. Optimize System Performance
ANSWER: D
31 If choice of project structure exists, first problem is to determine
A. Kind of work
B. Scope
C. Strategy
D. Complexity
ANSWER: A
32 When complex organizations conduct projects, projects usually require input from several
A. Functional departments
B. Marketing departments
C. Senior management
D. Management department
ANSWER:A
33 A complete list of categories and key words are used in risk management group to categorize
A. Risks
B. Assumptions
C. Environments
D. All of the above
ANSWER: D
34 Projects of complex organizations usually require input from several functional
departments, which creates
A. Overlapping
B. Shared Responsibility
C. Both A and B
D. Virtualization
ANSWER: C
35 Previously, when a high-technology project was undertaken by a firm, it would start its
journey through firm in
A. Manufacturing department
B. Functional department
C. Execution Department
D. R & D department
ANSWER: D
UNIT-III
1. Which of the following statements is not true when describing a successful
strategy?
A. It provides some property that is unique or distinctive
B. It provides the means for renewing competitive advantage
C. It addresses changes in the external environment
D. It guarantees long term survival
ANSWER: B
2. In the context of strategic management resources can be defined as:
A. The knowledge and skills within the organization
B. Something that an organization owns or controls that cannot be copied
C. Something that an organization owns, controls or has access to on a semipermanent basis
D. The physical assets of the organization
ANSWER :D
3. In the context of strategic management, stakeholders can be defined as:
A. An individual or group with a financial stake in the organization
B. An external individual or group that is able to impose constraints on the
organization
C. Internal groups or individuals that are able to influence strategic direction of the
organization
D. An individual or group with an interest in the organization's activities and who
seeks to influence them
ANSWER:C
4. In the case where an organization acquires its supplier, this is an example of:
A. Horizontal integration
B. Forwards vertical integration
C. Backwards vertical integration
D. Downstream vertical integration
ANSWER 4:D
5. When a firm seeks the benefits of global integration and local adaptation, it is best
described as which type of strategy?
A. Transnational
B. Global
C. Multi-national
D. Global-local
ANSWER :A
6. Knowledge which is difficult to define and codify is known as:
A. Explicit
B. Tangible
C. Tacit
D. Random
ANSWER :A
7. Competitive advantage based on the creation of opportunities using internal
resources is characterized by which approach/view?
A. The positioning approach
B. The outside-in approach
C. The resource-based view
D. The knowledge-management approach
ANSWER :C
8. 'Reputation' in the context of an organization's resources can provide competitive
advantage because:
A. It is difficult to copy
B. It is based on word-of-mouth
C. It is a threshold resource
D. It is explicit
ANSWER :A
9. A strategic manager that seeks to reach acceptable profit targets as opposed to making
as much profit as possible is making decisions of which type?
A. Satisfactory
B. Satisficing
C. Irrational
D. Optimal
ANSWER :A
10. A strategic decision can be distinguished from other types of decisions by three factors,
these are magnitude, time-scale and:
A. Commitment
B. Riskiness
C. Impact
D. Longevity
ANSWER :B
11. 'Logical incrementalism' can be described as:
A. Careful design and planning
B. Emergent
C. Cautious resource allocation
D. Top management rational analysis
ANSWER :D
12. An organization in which strategy development is characterized by internal political
negotiation and self-interest is operating in which strategy-making mode?
A. The transactive mode
B. The muddling through mode
C. The command mode
D. The emotional mode
ANSWER:C
13. 'Influence' is defined as the ability to ____________ someone to something they would
not otherwise have done.
A. Intimidate
B. Force
C. Order
D. Persuade
ANSWER :A
14. McDonalds is deciding whether to expand into manufacturing kitchen equipment in
China. At what level is this decision likely to be made?
A. Business
B. Corporate
C. Functional
D. International
ANSWER :A
15. The authors believe there are three tests that can be applied to judge whether a
strategy is 'good'. These are:
A. Fit, distinctiveness, sustainability
B. Fit, internal resources, external environment
C. Distinctiveness, internal resources, fit
D. Sustainability, distinctiveness, external environment
ANSWER :B
16. Diversification into many unrelated areas is an example of:
A. Risk management
B. Good management
C. Uncertainty reduction
D. Sustainability
ANSWER :C
17. According to Porter, dealing with the paradox of premature commitment versus not
enough commitment involves some kind of:
A. Trade-off
B. Lock-in
C. Lock-out
D. Diversification
ANSWER :C
18. Corporate governance is concerned with:
A. Executive remuneration, disclosure of information, auditing and accounting
procedures, and organizations' management structures
B. Elections to the board of directors
C. Relationships with national governments
D. Corporate-level strategy
ANSWER :C
19. The principal-agent problem is concerned with:
A. Procurement
B. Appropriation of shareholders' investment by a firm's managers
C. How to control a firm's distributors and dealers
D. Corporate social responsibility
ANSWER :D
20. In terms of the PESTLE analysis, the liberalizing of international trade and tariff
regimes could go in which section or sections?
A. Political
B. Legal
C. Political and economic and legal
D. Political and environmental
ANSWER :D
21. Porter's generic strategies are:
A. Low price, differentiation, focus
B. Cost leadership, differentiation, cost focus, focus differentiation
C. Price leadership, differentiation, focus
D. Low cost, differentiation, focus differentiation
ANSWER:C
22. According to Porter, if an organization does not follow either a cost leadership strategy or
a differentiation strategy they are:
A. Hybrid
B. Stuck in the middle
C. Typical
D. No frills
ANSWER :B
23. Subsidiaries consider regional environment for policy / Strategy formulation is known
as
A. Polycentric Approach
B. Regio centric Approach
C. Ethnocentric Approach
D. Geocentric Approach
ANSWER :A
24. A likely consequence of merger and acquisition is:
A. Lower revenues
B. Price increase
C. Higher costs
D. Price decrease
ANSWER :B
25. A likely consequence of rationalization is:
A. Lower number of employees
B. Lower revenues
C. Higher costs
D. Price decrease
ANSWER :C
26 According to brand personality traits, 'sophistication' is concluded as brand being
A. reliable and intelligent
B. daring and imaginative
C. cheerful and wholesome98
D. charming and upper class
ANSWER: D
27 A company's microenvironment, ' customer markets' are of
A. 5 types
B. 4 types
C. 3 types
D. 2 types
ANSWER : A
28 Social class who rely on relatives for assistance in trouble times and economic support
considered as
A. upper middles
B. working class
C. middle class
D. upper uppers
ANSWER : B
29 Markets in which market offerings are bought from sellers for reselling purpose are known
AsA. business markets
B. reseller markets
C. government markets
D. international markets
ANSWER : B
30 Personal factors include
A. online communities
B. social class
C. personality and self-concept
D. roles and status
ANSWER : C
31 In macro environment, 'pressure groups' and 'government agencies' are part of
A. the cultural environment
B. the demographic environment
C. the economic environment
D. the political environment
ANSWER :D
32 Tendency to which experiences of potential customers fits with innovation is called
A. relative advantage
B. divisibility
C. communicability
D. compatibility
ANSWER : D
33 A company's microenvironment, 'general publics' consists of
A. minority groups
B. stockholders
C. Community organizations
D. public image
ANSWER : D
34 Mental process in which customer ends up as buyer of a new product is called
A. adoption process
B. cognitive dissonance
C. pre purchase behavior
D. post-purchase behavior
ANSWER : A
35 Cultural factors must include
A. beliefs and attitudes
B. social class
C. occupation
D. roles and status
ANSWER : B
UNIT-IV
1 Different cultures sometimes vary in their attitudes to time. In cultures where people follow
event time:
A. It is important to turn up for meetings on time.
B. Much time is devoted to having a chat over a coffee during the working day.
C. People get irritated if meetings do not start on time.
D. Where an event is running over time, people do not wait for it to finish before
moving on to the next event.
ANSWER :B
2 Ageing of the population is caused by:
A. Low birth rates.
B. High death rates.
C. The immigration of workers from other countries.
D. High fertility rates.
ANSWER :A
3 The social democratic welfare model holds that:
A. Dialogue between the social partners is not worthwhile.
B. Unemployment is best dealt with through market forces.
C. High levels of public expenditure should be avoided.
D. Governments should actively assist people in finding work.
ANSWER :D
4 Researchers have found that attitudes to contracts vary from one culture to another.
Which of the following is correct?
A. Western cultures see contracts, once signed, as changeable.
B. Eastern cultures see contracts, once signed, as unchangeable.
C. Western cultures see contracts, once signed, as set in stone.
D. Both western and eastern cultures see contracts, once signed, as set in stone.
ANSWER :C
5 Hofstede found that some countries have a long-term orientation while others focus on the
short term. His results mean that:
A. US business would be happy to invest in nuclear power and space exploration
without any government help.
B. British businesses prefer investments with a quick return.
C. Firms in Brazil shy away from ten-year investment projects.
D. Indian business is impatient for a return on its investments.
ANSWER :B
6 Which of the following is not a feature of a transnational corporation?
A. Decision making takes place at the local level.
B. Nationals are typically hired to run operations in each country.
C. Marketing strategies are tailored to each country’s culture.
D. Products are manufactured only in the local country.
ANSWER :D
7 The reason that a nation’s cultural differences are the most difficult to gain information
about is because __________________.
A. people tend to be sensitive about their own culture
B. providing this information to foreign organizations reduces a competitive business
advantage
C. there is little written on the issue
D. “natives” are least capable of explaining the unique characteristics of their own
culture
ANSWER :D
8 According to the textbook, the most valuable framework to help managers better
understand differences between national cultures was developed by ______________.
A. Milton Friedman
B. Michael Porter
C. Geert Hofstede
D. Abraham Maslow
ANSWER :C
9 _____________ is a cultural dimension in which people expect others in their group
to look after them and protect them when they are in trouble.
A. Power distance
B. Collectivism
C. Quantity of life
D. Uncertainty avoidance
ANSWER :B
10 An environment which is increasingly complex and turbulent displays:
A. More orderly competition.
B. A reduced risk of product obsolescence.
C. More predictable demand.
D. Increased speed of innovation.
ANSWER :A
11 Which of the following is NOT a business opportunity generated by globalization?
A. Access to low cost labour.
B. Cheap International transport.
C. Currency crises.
D. Less stringent regulation of the business environment.
ANSWER :B
12 In a global market place Managers must
A. deals with economic, political and cultural differences
B. expect competitors to suddenly appear at any time from any place
C. not to take specific differences of local environment into consideration
D. A and B
ANSWER :D
13 Specific cultural dimensions that does not have a significant impact on cross national
business interactions is
A. Hofstede’s five cultural dimensions
B. Monochromatic vs polychromatic tune
C. Communication
D. Geography
ANSWER:D
14 The corporate culture of a firm is more effectively carried to the managers who are
A. Host country nationals
B. Home country nationals
C. Third country nationals
ANSWER:
15 Nonverbal communication:
A. Includes written communication
B. Has no place in international business.
C. Include body languages
D. Should be learnt by business managers to communicate with foreigners.
ANSWER:C
16 Professional culture refers to
A. Shared belief of top managers about how they should manage about themselves
and their employees
B. Shared code of ethics and other commonalities shared by members of a give group
C. Both (a) and (c)
ANSWER B
17 Corporate governance is concerned with:
A. Executive remuneration, disclosure of information, auditing and accounting
procedures, and organizations' management structures
B. Elections to the board of directors
C. Relationships with national governments
D. Corporate-level strategy
ANSWER A
18 An environment which is increasingly complex and turbulent displays:
A. More orderly competition.
B. A reduced risk of product obsolescence.
C. More predictable demand.
D. Increased speed of innovation.
ANSWER :D
19 The corporate culture of a firm is more effectively carried to the managers who are
A. Host country nationals
B. Home country nationals
C. Third country nationals
ANSWER B
20 In 90’s the global management perception was based on
A. Standardization v/s adaptation
B. Globalization v/s localization
C. Global integration v/s Local Responsiveness
D. Local responsiveness
ANSWER:B
21 The following is not considered as an acceptable motivation for foreign assignments:
A. Desire for adventure.
B. Desire to increase chances of promotion.106
C. Escape from boredom of present assignment.
D. Desire for luxry
ANSWER:C
22 It was recognized in the 1990s that physical assets are not the only thing that needs to be
included in the valuation of a firm. In Europe, firms also included a supplement detailing
the:
A. Goodwill
B. Intellectual capital
C. Brand reputation
D. Knowledge
ANSWER:B
23 The primary stakeholders are:
A. Customers.
B. Suppliers.
C. Shareholders.
D. Creditors.
ANSWER:C
24 The goal of corporate governance and business ethics education is to:
A. Teach students their professional accountability and to uphold their personal
Integrity to society.
B. Change the way in which ethics is taught to students.
C. Create more ethics standards by which corporate professionals must operate.
D. Increase the workload for accounting students.
ANSWER :C
25 The corporate governance structure of a company reflects the individual companies’
A. Cultural and economic system.
B. Legal and business system.
C. Social and regulatory system.
D. All of the above.
ANSWER :D
26 Classification of international employees include
A. expatriates
B. host country nationals
C. third country nationals
D. all of the above
ANSWER : D
27 Global assignments in which employees are sent for strategic jobs having intercultural
understanding are classified as
A. development assignments
B. non development assignments
C. strategic assignments
D. managerial assignments
ANSWER: C
28 If employee is citizen of India, working in U.S and employed by company whose
headquarters are in Japan then employee is classified as
A. third country nationals
B. third world employees
C. expatriates
D. host country nationals
ANSWER: A
29 Factors that affect global human resource management are
A. economic factors
B. societal factors
C. cultural factors
D. all of the above
ANSWER:D
30 Kind of organization which have integrated worldwide corporate units in different countries
is classified as
A. alliance enterprise
B. global enterprise
C. interdependence enterprise
D. multinational enterprise
ANSWER: B
31 Concept which defines inequality among nation explained in cultural dimension is
classified as
A. power distance
B. orientation distance
C. expatriation distance
D. repatriation distance
ANSWER: A
32 Dimension of culture which defines extent of people how they act as individuals instead
of representing as groups is classified as
A. orientation distance
B. power distance
C. individualism
D. certainty avoidance
ANSWER: C
33 Dimension of culture in which masculine values prevail over feminism values is classified
as
A. masculinity ⁄ femininity
B. power distance
C. orientation distance
D. none of above
ANSWER: A
34 All societal forces that affect values, actions and beliefs of different groups of people are
altogether called
A. expatriation
B. repatriation
C. culture
D. economy
ANSWER: C
35 Buying and selling of products and services from firms in other countries is called
A. importing and exporting
B. regional alliances
C. national alliances
D. international alliances
ANSWER: A
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
IBRD also known as _____.
a. Exim Bank
b. World Bank
c. International Monetary fund
d. International Bank
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
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
Ultimately ______ was replaced by the ______ on 1st Jan 1995.
a. GATS, WTO
b. WTO, GATT
c. GATT, WTO
d. IMF, GATT
______ is the application of knowledge which redefines the boundaries of global business.
a. Cultural Values
b. Society
c. Technology
d. Economy
Subsidiaries consider the regional environment for policy or Strategy formulation is known
as _____.
a. Polycentric Approach
b. Regiocentric Approach
c. Ethnocentric Approach
d. Geocentric 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
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
IPR stands for ______
a. Intellectual property rights
b. International property rights
c. Internal promotion rights
d. Interior promotional rights
Capitalistic, communistic and Mixed are the types of ______.
a. Economic System
b. Social System
c. Cultural Attitudes
d. Political System
______ is not an Indian Multinational Company.

a. Unilever
b. Asian Paints
c. Piramal
d. Wipro
Which of the following is not a force in the Porter Five Forces model?
a. Buyers
b. Suppliers
c. Complementary products
d. Industry rivalry
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.
________ 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

The ___________ company produces, markets, invests and operates across the world.
a. Global
b. International
c. Transnational
d. Multinational
MNC Stands for ______.

a. Multi-National Cooperation
b. Multi-National Corporation
c. Multi-National Company
d. Multi-National Collaboration
________ is the first step in the internationalization process.
a. License
b. Foreign Investment
c. Sales
d. Export
SMEs stands for ______.
a. Small and Medium Entrepreneurs
b. Small Management of Enterprises
c. Small and Medium-sized Enterprises.
d. Societies for Managing Exports
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
The Theory of Absolute Cost Advantage is given by ______

a. David Ricardo
b. Adam Smith
c. F W Taylor
d. Ohlin and Heckscher
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
Comparative Cost Trade Theory is given by ______
a. Adam Smith
b. David Ricardo
c. Gottfried Haberler
d. Heckscher Ohlin
________ 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
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
The WTO was established to implement the final act of Uruguay Round agreement of _______
a. MFA
b. GATT
c. TRIP’s
d. UNO
WTO stands for ______
a. World technology association
b. World time organization
c. World trade organization
d. World tourism 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
The main promoter of trade liberalization was ______.
a. GATT
b. NAFTA
c. CEPTA
d. CISA
Select an example of Indian Multinational Company.
a. Hindusthan Unilever
b. Videocon
c. Cargill
d. Tesco
International trade contributes and increases the world _________
A. Population
B. Inflation
C. Economy
D. Trade Barriers
The ratio of trade to GDP was as high as _________ in 1913.
A. 22.1
B. 11.2
C. 26.3
D. 33.2
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.
Domestic company limits it’s operations to ___________ political boundaries.
A. International
B. National
C. Transnational
D. Global
Trade between two or more than two countries is known as ________.
A. Internal Business
B. External Trade
C. International Trade
D. Unilateral Trade
_____refers to the tax imposed on imports.
A. Imported Tax
B. Tariffs
C. Subsidies
D. Import Quotas
_____ means selling the products at a price less than on going price in the market.
A. Quota
B. Tariff
C. Subsidy
D. Dumping
_______is the oldest International Trade theory.
A. Country Similarity Theory
B. Theory of Absolute Cost advantage
C. Product Life Cycle Theory
D. Mercantilism Theory
A voluntary export restraint is the opposite form of _____.
A. Import quotas
B. International tariffs
C. Subsidies
D. Dumping
The international trade between ___________ is like a vast game of beggar my neighbour.
A. Exporter & Importer
B. Two Countries
C. Two world wars
D. Country’s allies and enemies
____ is a group of countries agree to abolish all trade restrictions and barriers.
A. Common market
B. Economic Union
C. Custom Union
D. Free Trade Area
EU stands for _____
A. Export Union
B. European Union
C. EXIM Union
D. Export Unit
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
The full form of WTO is __________
A. World Tariff Organization
B. World Trade Organization
C. Western Trade Organization
D. World Transport Organization
________was replaced by WTO on January 1, 1995.
A. NAFTA
B. IMF
C. IRDB
D. GATT
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
AFTA is ___________.
A. ASEAN Free Trade Area
B. American Free Trade Area
C. Asian Free Trade Area
D. Agreement for Free Trade Area
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
__________was established by a multilateral treaty of 23 countries in 1947.
A. WTO
B. UN
C. GATT
D. NAFTA
In International Trade, IMF stands for ___________.
A. International Monetary Fund
B. International Money Fund
C. International Market Fund
D. International Monetary Firm
An import tariff is a tax or duty levied on ___________ commodities.
A. Imported
B. Exported
C. Transported
D. Both A & B
An _____________ is a tax or duty levied on exported commodities.
A. Import Tariff
B. Export Tariff
C. Transport Tariff
D. Free Trade Tariff (FTT)
__________refers to purchase of goods from a foreign country.
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM 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
In most countries, foreign trade represents a significant share of ______
A. EXIM
B. FDI
C. Income Per Capita
D. GDP
Cash grants, loans at low rate and tax holidays are examples of ______.
A. Quotas
B. Tarifs
C. Subsidies
D. Discounts
_________refers to the sale of goods to a foreign country.
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM Trade
________is a combination of an ad valorem and specific tariff.
A. Anti dumping tariff
B. Specified Valorem Tariff
C. EXIM Tariff
D. A compound tariff
Foreign trade is an exchange of capital, goods, and services across _________ borders or territories
A. Intranational
B. National
C. International
D. Both A & C
_______ refers to goods imported from one country and are exported to another country.
A. Third Party Trade
B. Entrepot trade
C. Export Trade
D. EXIM Trade
_____ provided a series of ’rounds’ of negotiations by which tariffs were reduced.
A. IMF
B. NAFTA
C. IBRD
D. GATT
______ happens when Imports are more than exports.
A. Trade barrier
B. Trade deficit
C. Trade surplus
D. Trade contract
______ happens when Exports are more than imports.
A. Trade barrier
B. Trade deficit
C. Trade surplus
D. Trade contract
BOP stands for ________.

A. Bank of Payments
B. Barrier of Payments
C. Bill of Payments
D. Balance of Payments
The ________ is composed of capital account and current account.
A. Bill of credit
B. Barrier of Payments
C. Bill of Payments
D. Balance of Payments
The full form of UNCTAD is ______
A. United Nations Conference on Tariff and Duties
B. United Nations Committee on Trade and Development
C. United Nations Conference on Trade and Development
D. United Nations Council on Tariff and Development
1. ___ has grown to be one of the most important features of the world’s economy.
a. International Business
b. Globalization
c. Liberalization
d. All of the above
Ans: A
2. Many US information technology companies are turning to International locations to remain-
a. Leader
b. Competitor
c. Stable
d. Master
Ans: B
3. Salaries and fringe costs for well-trained software engineers in Northern Ireland approximately ___
lower than costs for US engineers.
a. 50%
b. 80%
c. 47%
d. 69%
Ans: A
4. ___ is a process that is beneficial – a key to future world economic development- and also inevitable
and irreversible.
a. Privatization
b. Globalization
c. Liberalization
d. Economist
Ans: B
5. Economic globalization is a historical process, the result of ___.
a. Human innovation
b. Technological Progress
c. Both a and b
d. Knowledge
Ans: C
6. True/False:
‘Globalization means that world trade and financial markets are becoming more integrated.’
a. True
b. False
c. Incomplete
d. Can’t say
Ans: A
7. ___ is at least as important for long-term development as financial transfers.
a. Economic stability
b. Institution building
c. Structural reform
d. All of the above
Ans: D
8. Supporters of democratic globalization are sometimes called
a. Globalists
b. Pro-globalists
c. Libertarians
Ans: B
9. ___ has made great advances in areas such as Bangladesh through economically liberating and
empowering women with jobs.
a. Democratic
b. Feminism
c. Globalization
d. Liberalization
Ans: B
10. In 2002, ___ was the third-largest exporter of cultural goods, after the UK and the US.
a. China
b. India
c. Kuwait
d. Korea
Ans: A
11. ___ Companies are registered in one country, doing business in others.
a. Transnational
b. Multinational
c. Off-shore
d. International
Ans: C
12. The difference between interest rates in Russia and Switzerland stands for about ___ per annum.
a. 10%
b. 5%
c. 28%
d. 40%
Ans: B
13. Globalization refers to a growing economic interdependence among countries, as reflected in the
increased cross-border flow of :
a. goods & services
b. capital
c. know-how
d. World economy
e. All of the above
Ans: E
14. It refers to the assumptions, values, and practices of people in the West and some elites in Non-
Western cultures.
a. Universal Culture
b. Global culture
c. Organizational culture
d. All of the above
Ans: A
15. ___ means the high adaptation of managerial practices to a given culture, and, therefore, high
effectiveness.
a. Fitness for use
b. High fit
c. Fit and Fine
d. Substitution
Ans: B
16. Erez and Gati proposed that the general model of multi-level analysis could be adopted for
understanding the dynamics of ___.
a. Culture
b. Cultural Change
c. Multi-Level analysis
d. Both a and b
Ans: D
17. State whether it is true or not:
“Around the World, wherever you are, get what you want-fast from our family of Web sites.”
a. False
b. True
c. Incomplete
d. Cannot say
Ans: B
18. ___ has become a world-leading marketer of toys.
a. California
b. UAE
c. Japan
d. China
Ans: A
19. The main benefits for industrial countries would come from the liberalization of their ___ market.
a. Mine
b. Agriculture
c. Domestic
d. National
And: B
20. The non-tariff barriers are:
a. Product standards
b. Proliferation
c. Both a and b
d. Product adaptation
Ans: C
21. The ___ step in determining your license requirements is to classify your product using the
Commerce Control List (CCL).
a. First
b. Second
c. Third
d. Last
Ans: A
22. Life Cycle Theory has been used since the ___ to describe the behaviour of a product or service from
design to obsolescence.
a. 1986
b. 1970
c. 1982
d. 1975
Ans: B
23. Here the firm may continue to market the product hoping that competitors will discontinue their
products.
a. Maturity stage
b. Growing Stage
c. Decline Stage
d. Saturation Stage
Ans: C
24. ___ specify the type of system, equipment, tooling, layout, and flow used in manufacturing or service
operations.
a. Process engineering
b. Design engineering
c. Life cycle engineering
d. All of the above
Ans: A
25. ___ claims that knowledge is being applied faster, resulting in increasing levels of new product
introductions.
a. Slater (1993)
b. Bayus (1994)
c. Vesey (1992)
Ans: B
26. The five-element product wave, or FPW, uses trigger points, rather than ___, as the horizon over
which the element curves vary.
a. Cost
b. Price
c. Time
d. All of the above
Ans: C
27. A financial services deal covering more than 95% of trade in banking and ___.
a. Insurance
b. Securities
c. Financial Information
d. All of the above
Ans: D
28. The seeds of the Uruguay Round were sown in ___, at the Ministerial Meeting of GATT members in
Geneva.
a. November 1982
b. January 1970
c. March 2005
d. July 1985
Ans: A
29. Numerous specialized ___ reports to the General Council.
a. Committees
b. Working groups
c. Working parties
d. All of the above
Ans: D
30. Day-to-day work in between the ministerial conferences is handled by:
a. The General Council
b. The Dispute Settlement Body
c. The Trade Policy Review Body
d. All of the above
Ans: D
31. TRIPS Council is for:
a. Goods Council
b. The council for trade-related aspects of Intellectual Property Rights
c. Services Council
d. Both a and c
Ans: B
32. ___ Subsidiary bodies deal with financial services, domestic regulations, GATS rules and specific
commitments.
a. Goods Council
b. The council for trade-related aspects of Intellectual Property Rights
c. Services Council
d. Both a and c
Ans: A
33. An Industry composed of a limited number of large firms.
a. OECD
b. Oligopoly
c. MNE
d. MAI
Ans: B
34. MITI is the ___ Ministry of International Trade and Industry.
a. Japan
b. China
c. India
d. American
Ans: A
35. Maastricht Treaty ratified in
a. January 1991
b. January 1994
c. January 1995
d. January 1992
Ans: B
36. Products adapted to the perceived unique characteristics of the national market.
a. Local Products
b. International Products
c. Multinational Products
d. Global products
Ans: C
37. ___ in Seller’s country forwards a letter of credit to Seller informing about the terms and conditions
of credit.
a. Advising Bank
b. Service Bank
c. Advisory Commission
Ans: A
38. The term ___ is also used in the RO/RO (roll-on/roll-off) services.
a. FOB
b. FCA
c. FAS
d. EXW
Ans: B
39. A commonly used measure of inequality is the ___ coefficient for income, which takes on values
between zero and one, a value of zero would indicate perfect equality of incomes.
a. Transition
b. Transmission
c. Gini
d. Labor earning coefficient
Ans: C
40. UNCITRAL texts are initiated, drafted, and adopted by the ___ on International Trade Law.
a. United States Commission
b. United Nations Commission
c. G-20 Group
Ans: B
41. The IMR Company also operates two separate software development plants in ___ and ___, India.
a. Bangalore, Delhi
b. Delhi, Mumbai
c. Bangalore, Mumbai
d. All of the above
Ans: C
42. Globalization refers to the movement of (people), ___ and (knowledge) ___, across International
borders.
a. Labor, Technology
b. Human innovation, Technological progress
c. Easier, quicker
d. Financial, Competition
Ans: A
43. Growth in living standards springs from the accumulation of physical (capital) ___ and (human
capital) ___, and through advances in technology.
a. Productivity, labour
b. Investment, labour
c. Investment, Productivity
d. All of the above
Ans: B
44. Government Policy should focus on the ___ important areas:
a. Educational and vocational training, to make sure that workers have the opportunity to acquire the right
skills in dynamic changing economies.
b. Well-targeted social safety nets to assist people who are displaced.
c. Both a and b
d. Capital, Investment
Ans: C
45. Globalization as the beneficial spread of ___ and ___.
a. Liberty, Capitalism
b. Society, Economy
c. Both a and b
d. Capitalism, the economy
Ans: A
46. The ___ are likely to work for a single Company for a lifetime, moreover, to work overtime and favor
their chief with great respect but the ___ employees change jobs quite more often.
a. Japanese, US
b. Japanese, Britain
c. Both a and b
Ans: C
47. ___ and ___ are increasing in organizations today because of changing demographics, the desire by
organizations to improve their workforce, legal pressures & increased globalization.
a. Diversity, Multiculturalism
b. Variety, Diversity
c. Variation, Diversification
d. All of the above
Ans: A
48. The ___ ideology suggests that each cultural group loses some of its dominant characteristics in order
to become the mainstream.
a. Multiculturalism
b. Melting Pot
c. Universal culture
d. Magna Mac
Ans: B
49. The assumption of cultural stability is valid as long as there are no ___ changes that precipitate
adaptation and ___.
a. Environmental changes, Cultural Changes
b. Management, Organizational changes
c. Organizational changes, Cultural changes
Ans: A
50. ___ Approach, viewing culture as a multi-level construct that consists of various levels nested within
each other from the most ___ of global culture, through national cultures, group cultures.
a. Micro-level, micro-layer
b. Multi-level, macro-level
c. Multi-level, multi-layer
d. Both a and c
Ans: B
51. Both ___ and ___ processes reflect the dynamic nature of culture.
a. Top-down, Bottom-up
b. Upward, Downward
c. Vertical, horizontal
Ans: A
52. A recent study by Erez and Gati (2004) examined the effects of various factors on the change process
and its outcomes:
a. The cultural value of individualism-collectivism
b. The reward structure and its congruence with the underlying cultural values
c. The degree of ambiguity in the reward structure
d. All of the above
Ans: D
53. Policies that make an economy open to ___ and ___ with the rest of the world are needed for
sustained economic growth.
a. Trade, Investment
b. Trade, labor
c. Capital, Investment
d. Capital, labor
Ans: A
54. The failure to start a new round of multilateral trade negotiations at the WTO conference in ___ in
___ was a setback for the international trading system.
a. US, 1997
b. Seattle, 1999
c. China, 2005
d. Africa, 1998
Ans: B
55. The ___ and ___ have allowed globalization outsourcers to develop new models for process-rich,
cost-effective repeatable globalization methodology.
a. Internet, technology
b. Internet, intranet
c. Internet, Global communications
d. Internet, Electronic media
Ans: C
56. Intellectual property rights refer to the legal system that protects:
1. Patents
2. Trademarks
3. Copyrights
4. Trade secrets
a. 1, 3, 4
b. 1, 2, 3
c. 2, 3, 4
d. 1, 2, 3, 4
Ans: D
57. The duration of each stage of the cycle varies with the ___ and the type of ___ supporting it.
a. Product, management
b. Product, Customer
c. Product, market
d. Product, location
Ans: A
58. ___, in which the good or service is taken from concept and detail design to prototyping. Whereas in
___, technologies and production methods are evaluated as a system is set into motion.
a. Product engineering, Design engineering
b. Design engineering, Process engineering
c. Product engineering, Process engineering
d. All of the above
Ans: B
59. Hecksher-Ohlin Model draws a sharp distinction between ___ and ___ factor mobility.
a. Internal, external
b. Domestic, external
c. Organizational, external
d. Initial, final
Ans: B
60. CRS (Constant Returns to Scale):
a. y = F(L, K) then y’ = F ( 2L, 2K) = 2y
b. y = F (K, L) then y’ = F ( 2K, 2L)=y
c. y’ = F (L, M) then y = F ( 2L, 2M)
Ans: A
1. ___ can be defined as any business that crosses the national borders of the country of its establishment.
Ans. International business
2. Exports and imports do not constitute an international business. (True/False)
Ans. False
3. ___ is considered the first MNC in the world.
Ans. British East India Company
4. Bretton Woods conference led to the formation of ___.
a) World Trade Organisation
b) International monetary fund
c) United Nations Organisation
d) General Agreement on Trade and Tariffs
Ans. b) International monetary fund
5. Domestic businesses need to comply with the accounting and taxation standards prevailing in that
country. (True/False)
Ans. True
6. ___ is not an advantage of international business.
a) Low-cost production
b) Market forces
c) Large customer base
d) Diversified risk
Ans. b) Market forces
7. Franchising and licensing are barriers to international business. (True/False)
Ans. False
8. Technological innovations and diminishing trade barriers are ___ of international business.
Ans. Drivers
9. Companies, which invest in other countries for business and also operate from other countries, are
considered as ___.
Ans. Global companies
10. International and global business is different. (True/False)
Ans. True
11. Globalisation improves the living standards of people in developing countries. (True/False)
Ans. True
12. ___ can be defined as the worldwide trend of businesses expanding beyond their domestic
boundaries.
Ans. Globalization
13. Trade theories help forecasts and diagnose country trade patterns & trends. (True or False)
Ans. True
14. Opportunity cost and efficiency in production do not vary from country to country. (True or False)
Ans. False
15. Trade occurs as a result of:
a. Choice differential.
b. Habit differential.
c. Taste differential.
d. Resource differential.
Ans. Resource differential
17. What are the inherent weaknesses of Mercantilism theory?
Ans. Too much focus on exports only
18. What are the assumptions of the Heckscher-Ohlin Theory?
Ans. Factor endowment
19. What is the main assumption of Absolute Cost Advantage Theory?
Ans. Labour is the only factor of production
21. FDI policy is dictated by the government of the host country. (True/False)
Ans. True.
22. Balance of payment is an indicator of a country’s ___.
Ans. Economic health.
23. Political factors define the economic and legal environment in a business environment. (True/False)
Ans. True.
24. ___ refers to the absolute power of the state to coerce and control its citizens.
a) Sovereignty
b) National interest
c) Political stability
d) Political risk
Ans. a) Sovereignty.
25. The two types of political risks are ___ and ___.
Ans. Macro and micro risk.
26. Three of the most used legal systems are ___, ___ and ___.
Ans. Common law, code law, and Islamic law.
27. Scanning of demography provides specific information about different consumer groups
(True/ False)
Ans. True.
30. The consumer tastes and preferences across countries are similar. (True/False)
Ans. False
31. Match the following:
a) PDI 1) tolerance for uncertainty and ambiguity.
b) Individualism 2) pragmatic future-oriented perspective.
c) Masculinity 3) equality or inequality between individuals.
d) UAI 4) individual or collective achievement.
e) LTO 5) support or does not support male dominance
Ans. (a) – 3, (b) – 4, (c) – 5, (d) – 1, (e) – 2
32. The most important cultural components of a country that relate to business transactions are ___, ___,
and ___.
Ans. Language, religion, conflicting attitudes
33. The combination of Japanese vagueness and lack of understanding results in problems that make
decision-making very twisted. (True/False)
Ans. True
34. Coded speech and verbosity are considered a waste of time and in time-pressured corporate ___, it is
a crime.
a) Brazil.
b) China.
c) the USA
d) France.
Ans. c) the USA
36. Diverse groups do not require time to solve issues of working together. (True/False)
Ans. False
37. In international management, where people are from different cultures, you have to develop and apply
your knowledge about cultures and not use a standard process for everyone. This is called ___.
Ans. Cross-cultural management.
38. Foreign investment is the investment by a foreign companies/ individual in an Indian
company/industry/sector. (True/False)
Ans. True
39. Foreign Investment is of two types – direct and portfolio investment. (True/False)
Ans. True
40. Identify the correct answer. Which of the following is not the result of foreign investment ___?
a) Improvement in human development skills.
b) Increased competition improved productivity.
c) Grants/donations to Indian companies.
d) Easier integration into the global economy.
Ans. C
41. Portfolio Investment is better for a country in the long run. (True/False)
Ans. False
42. India does not allow Greenfield investment in India? (True/False)
Ans. False
43. Which of the following is not the route for portfolio investment in a country?
a) Foreign Institutional Investor.
b) Joint Venture.
c) Depository Receipts.
d) Foreign Currency Convertible Bonds.
Ans. B
44. Regional integration can be defined as the unification of countries. (True/False)
Ans. True
45. Promoting ___ is a need of regional integration.
Ans. Economic diversification
46. Identify the correct answer. Regional integration should not ___.
a) Build environmental programs at the regional level
b) Strengthen trade integration in the region
c) Contribute to the peace and security of the region
d) Break ties with other countries
Ans. d) Break ties with other countries
47. Countries under a political union do not have a common government. (True/False)
Ans. False
48. Countries under a Common External Tariff on imports from non-members are known as Common
Market. (True/ False)
Ans. True
49. The purpose of an economic union is to promote closer ___ and ___ ties.
Ans. Cultural and political
50. Identify the factor of production.
a) Capital.
b) Consumers.
c) Market.
d) Policymaker.
Ans. a) Capital
51. The European Free Trade Association (EFTA) was established in the year:
a) 1950.
b) 1960.
c) 1970.
d) 1980.
Ans. b) 1960
52. ___ is a trade pact between Argentina, Brazil, Paraguay and Uruguay.
Ans. MERCOSUR
53. The EU comprises of ___ member states
Ans. 27
54. SAFTA agreement was initiated at the 12th SAARC summit held in Bangladesh. (True/False)
Ans. False
55. The Gulf Cooperation Council (GCC) is also known as the Cooperation Council for the Arab States
of the Gulf (CCASG). (True/False)
Ans. True
56. India and MERCOSUR signed a Framework Agreement on ___.
Ans. 17th June 2003
57. The association of India and ASEAN started in the year 1991. (True/False)
Ans. True
58. ___ is the process of conducting business in multiple countries.
Ans. International business.
59. IMF stands for:
a) International Monetary Fund.
b) International Management Foundation.
c) Indian Monetary Fund.
d) Indian Management Foundation.
Ans. a) International Monetary Fund.
60. NAFTA is major support for international business. (True/False)
Ans. False.
61. The WTO is the successor to the ___.
Ans. GATT.
62. Majority of the WTO members belong to developed countries. (True/False)
Ans. False.
63. The main objective of ___ agreement is to establish the framework for liberalising trade in services.
a) GATT.
b) NAFTA.
c) TRIPS.
d) GATS.
Ans. d) GATS.
64. The WTO agreements are a set of rules that are followed by the governments while formulating
policies and practices in the area of international trade. (True/False)
Ans. True.
65. The highest authority of WTO is the ___.
Ans. Ministerial Conference.
66. The ___ establishes and implements international labour standards.
Ans. International Labour Conference.
67. The Governing Body meets once a year in Geneva and takes decisions on the ILO policies.
(True/False)
Ans. False.
68. The ILO was created in:
a) 1920.
b) 1919.
c) 1929.
d) 1991.
Ans. b) 1919.
69. The body of ILO Conventions and Recommendations is commonly known as the International
Labour Conference. (True/False)
Ans. False.
70. The executive council of the ILO is known as the ___.
Ans. Governing body.
71. International financial management started with ___.
Ans. Liberalization
72. The management of finance in domestic and international business is considerably different.
(True/False)
Ans. True
73. The ___ may include any changes that will impact the economic environment of the country.
a) Foreign exchange
b) Political risks
c) Market imperfection
d) Enhance opportunity set
Ans. Political risks
74. A ___ needs a more complex calculation.
Ans. Forward market
75. The greater part of the world’s deal in foreign currencies is still taking place in the cities where the
international financial activity is centered. (True/False)
Ans. True
1. Bilateral arrangements instituted to restrain the rapid growth of exports of specific manufactured
goods, are called
A. Administered protection
B. Voluntary export restraints
C. Imposed export restraints
2. Which of the following is NOT true about the International Finance Corporation (IFC)?
A. IFC does not make its investments in partnership with the private investors from the capital
exporting country.
B. The minimum investment that the IFC will make in an enterprise is fixed at $10,000
C. Rate of interest in each case would be a matter of negotiations depending on the risk.
D. None of the above.
3. If a commodity X is subject to an import duty of 25% ad valorem, the nominal tariff is

A. 50%
B. 25%
C. 12.5%
D. 2.5%
4. An IMF member may purchase up to the full amount of its reserve tranche anytime
A. Without any condition
B. Subject only to the requirement of balance of payments need
C. Subject only to the requirements of development
5. Which of the following are included in the permanent facility for specific purpose of IMF?
A. The compensatory and contingency financing facility.
B. The buffer stock financing facility
C. The extended facility
D. All of the above
6. India is not associated with
A. SAARC
B. NAFTA right
C. BRICS
D. None of these
7. Consider the following
1. Tariff binding
2. Tariffication
3.Tariff cuts
4. Reduction in subsidies and domestic support

Which of the above are aspects of the Uruguay Round Agreement on agriculture?
A. 1,2 and 3
B. 2,3 and 4
C. 1, 3 and 4
D. 1,2 ,3 and 4
8. According to the credit tranche policy of the IMF, credit is made available in
A. Five tranches, each equivalent to 20% of country's qouta
B. Four tranches, each equivalent to 25% of country's quota
C. Ten tranches, each equivalent to 10% of country's SDRs
D. Four tranches, each equivalent to 25% of country's SDRs
9. The licence necessary to obtain foreign exchange to pay for the imports, is called
A. Foreign exchange licence
B. Import licence
C. Quota licence
11. The Uruguay Round Agreement deal with subsidies which are
A. Prohibited subsidies
B. Actionable subsidies
C. Non-Actionable subsidies
D. All of the above
12. Under which system of valuation, SDRs were valued in terms of 16 currencies, which were assigned
specific weights?
A. Standard basket valuation
B. Standard charted valuation
C. Various currencies valuation
13. Mr. James a citizen of US arrived in India for the first time of 1st July, 2010 and left for Nepal on
15th Dec. 2010. He arrived to India again on 1st January, 2011 and stayed till the end of the financial
year 2010-11. His residental status for the assessment year 2011-12 is
A. Resident (Ordinarily resident)
B. Not ordinarily resident
C. Non-resident
14. Which barrier can be used against recession induced exports into the country?
A. Quotas
B. Voluntary export restraints
C. Tariff
D. All of the above
15. A tariff fails to restrict imports when the demand for imports is
A. Perfectly price elastic
B. Price inelastic
C. Of unitary price elasticity
1. 4. Which is the right sequence of stages of Internationalization
5. Subsidiaries consider the regional environment for policy / Strategy formulation is known
as
a. Polycentric Approach
b. Regiocentric Approach
c. Ethnocentric Approach
d. Geocentric Approach
6. According to this theory, the holdings of a country’s treasure primarily in the form of gold
constituted its wealth.
a. Gold Theory
b. Ricardo Theory
c. Mercantilism
d. Hecksher Theory
7. The Theory of Absolute Cost Advantage is given by

a. David Ricardo
b. Adam Smith
c. F W Taylor
d. Ohlin and Heckscher
8. The Theory of Relative Factor Endowments is given by

a. David Ricardo
b. Adam Smith
c. F W Taussig
9. The theory of comparative cost advantage is given by

a. David Ricardo
b. Adam Smith
c. F W Taussig
10. ……………is the application of knowledge which redefines the boundaries of global
business
a. Cultural Values
b. Society
c. Technology
d. Economy
11. Capitalistic, communistic and Mixed are the types of

a. Economic System
b. Social System
c. Cultural Attitudes
d. Political System
12. Which is not an Indian Multinational Company?

a. Unilever
b. Asian Paints
c. Piramal
d. Wipro
13. Globalization refers to:

14. Which of the following is not a force in the Porter Five Forces model?
a. Buyers
b. Suppliers
c. Complementary products
d. Industry rivalry
Answer:c
15. Comparative Cost Trade Theory is given by
a. Adam Smith
b. David Ricardo
c. Gottfried Haberler
d. Heckscher Ohlin
16. …….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
Geographical indications specify
A.Place of origin of goods.
B. Special characteristics of the product associated with the place of origin.
C. Place and special characters of the product.
D. Place or special characters of the product.
ANSWER: C
2. Business across several countries with some decentralization of management decision

making to subsidiaries is
A. Global business.
B. Multinational business.
C. Transnational business.
D. Multi-regional business.
ANSWER: B
3. Land as a factor of production is immobile

A.Within the region.
B. Between the countries.
C. Within the nation.
D. In all cases.
ANSWER: D
4. Immobility of labour among nations is

A.Absolute.
B. Relatively of a higher degree than among regions in the same country.
C. Relatively easier than movement within the country.
D. Of the same degree as within the country.
ANSWER: B
5. Uneven distribution of natural resources

A.is the only cause for international business.
B. is the major factor for international business.
C. is among the major factors for international business.
D. is not a cause for international business.
ANSWER: C
6. The following factor does not differentiate the international business from domestic
business
A. different currencies
B. product quality
C. product mobility
D. trade policies
ANSWER: B
7. Free international trade maximizes world output through

A.Countries specializing in the production of goods they are best suited for.
B. Reduction in taxes.
C. Increased factor income.
D. Encouraging competition.
ANSWER: A
8. International business does not result in the following

A.Innovation is encouraged.
B. International cooperation is encouraged.
C. Imports are rendered cheap.
D. Consumption is minimized.
ANSWER: D
9. By entering into international business, a firm expects an improvement in
A.Marketing.
B. All spheres of marketing, operation and finance simultaneously.
C. Any or all spheres of marketing, operation and finance.
D. Finance only.
ANSWER: C
10. By having business in different countries, a firm reduces

A. credit risk.
B. political risk.
C. financial risk.
D. business risk.
ANSWER: B
11. Wholly owned subsidiary can be set up

A.as a Greenfield venture.
B. to acquire an existing firm.
C. to have products marketed overseas.
D. to have management is overseas.
ANSWER: A
12. The essential feature of FDI is

A.Investment of very high value.
B. Investment in shares.
C. Investor’s influence on the management of the enterprise.
D. Investment of low value.
ANSWER: C
13. No new investment in the host country is created in the case of

A.Greenfield FDI.
B. Acquisition.
C. Horizontal FDI.
D. Vertical FDI.
ANSWER: B
14. A firm investing in a foreign country to distribute the products therein creation of
A.Asset seeking FDI.
B. Backward vertical FDI.
C. Forward vertical FDI.
D. Distribution FDI.
ANSWER: C
15. The disadvantages of Greenfield FDI as compared to acquisition is

A.Profit will be less.
B. Size of investment will be high.
C. Lesser control in management.
D. Delay in the establishment.
ANSWER: D
16. Conglomerate FDI refers to

A.FDI made by a group of firms.
B. FDI made in subsidiaries.
C. FDI made in similar products.
D. FDI made in unrelated products.
ANSWER: D
17. Countries/ regions with huge market size will attract

A.Market seeking FDI.
B. Efficiency seeking FDI.
C. Vertical FDI.
D. Created assets seeking FDI.
ANSWER: A
18. The following statement with respect to culture is false

A. Culture is enduring.
B. Culture is changing.
C. Culture is evolved among the members of society.
D. Culture is determined by national boundaries.
ANSWER: D
19. The following is not a component of culture

A.Attitudes.
B. Beliefs.
C. Education.
D. Life expectancy.
ANSWER: D
20. Non- verbal communication

A. includes written communication.
B. has no place in international business.
C. includes body language.
D. should be learnt by business managers to communicate with foreigners.
ANSWER: C
21. Religion of a person affects his/her

A.attitude towards entrepreneurship.
B. gifting practices.
C. use of products.
D. all of the above.
ANSWER: D
22. For society, religion has no influence on
A. holidays.
B. language.
C. role of women.
D. marketing practices.
ANSWER: B
23. The role of women is restricted in

A. Eastern countries.
B. Middle East countries.
C. Traditional Islamic countries.
D. India.
ANSWER: C
24. The following nationals would be aggressive at the beginning of business negotiations
but offer large concessions in the end
A. American.
B. Russian.
C. German.
D. Japanese.
ANSWER: B
25. Social stratification is done on the basis of

A. Income level.
B. caste.
C. education.
D. any of the above.
ANSWER: D
26. Social mobility is measured by

A. The extent to which an individual can move the strata to which he/she belongs.
B. The promptness with which an individual accepts foreign assignments.
C. The extent to which inter-caste marriage is encouraged by society.
D. The extent to which the society as a whole shifts its habitat.
ANSWER: A
27. Lower power distance countries are characterized by

A. relationships based on equality and informality.
B. authority being accepted without question.
C. managers being paternalistic.
D. tall organizations structure.
ANSWER: A
28. A country with high uncertainty avoidance will witness

A. lower level of stress among people.
B. decision was taken as a result of group consensus.
C. less dependence on rules and regulations.
D. people are serene.
ANSWER: B
29. As per cultural dimensions of Hofstede, masculinity refers to

A. Male- female ratio in the country.
B. Society dominated by male members.
C. Society characterized by aggressive and materialistic behaviour.
D. War- ridden societies.
ANSWER: C
30. According to the economic growth model of Rostow, the passage of a country through
the stages is
A. in the order specified.
B. in any order.
C. in the order specified, but certain stages may be skipped.
D. automatic.
ANSWER: A
31. A country in the stage of traditional society is characterized by

A.existence of the traditional rule.
B. non-existence of industries.
C. predominance of agriculture.
D. complete absence of literacy.
ANSWER: C
32. The stage indicating the highest level of economic growth is

A. age of mass consumption.
B. age of mass production.
C. maturity.
D. drive to maturity.
ANSWER: A
33. The income level of residents in a country is indicated by

A. gross national income.
B. gross domestic product.
C. per capita gross national income.
D. per capita gross domestic product.
ANSWER: C
34. For a country with a relatively lower level of cost of living PPP per capita GNI will be
A. lower than per capita GNI.
B. higher than per capita GNI.
C. same as per capita GNI.
D. may be lower or higher than per capita GNI.
ANSWER: B
35. In a business cycle, the phase preceding prosperity is
A. recession.
B. depression.
C. recovery.
D. recession or depression.
ANSWER: C
36. Monetary policy relates to controlling

A. money supply.
B. money supply and interest rate.
C. money supply, interest rate and exchange rate.
D. credit creation by banks.
ANSWER: C
37. Analysing the business environment best assists in

A. Identifying key competitive forces; identifying competitive position; identifying key
opportunities, threats, strengths and weaknesses.
B. Auditing macro-environmental influences; identifying key competitive forces;
identifying competitive position; identifying key opportunities and threats.
C. Auditing external and organisational factors; identifying key competitive forces;
identifying competitive position; identifying key opportunities and threats.
D. Assessing historical trends; auditing environmental dangers; identifying strategic
capabilities; identifying competitive position.
ANSWER: B
38. In relation to the PESTEL framework, which of the following statements is correct?
A. It assists in the assessment of organisational strengths and weaknesses.
B. It allows a detailed analysis of the structure of an industry.
C. It can be used as a checklist to understand the different environmental influences in
the macro-environment.
D. Takes a historical perspective on the main political, economic, sociocultural,
technological, environmental and legal factors.
ANSWER: C
39. The following factors are key drivers of globalisation

A. Government action, exchange rates, competition and sociodemographic factors.
B. Market convergence, competition, exchange rates and cost advantages.
C. Cost advantages, government action, economic cycles and competition.
D. Market, cost, competition and government policies.
ANSWER: D
40. Scenarios are used to

A. Develop a long term view of strategy.
B. Build plausible views of different possible futures and develop a long term view of
strategy.
C. Identify key drivers of change.
D. Develop a view of an environment which has a high degree of uncertainty, build
plausible views of different possible futures and take a long term view of strategy.
ANSWER: D
41. Porter suggests the following reasons for one nation being more competitive than
another
A. Ability to speak English; a developed network of supporting industries; absence of
competition; and low labour cost.
B. Abundant natural resources; skilled labour force; temperate climate; and democracy.
C. Factor conditions; demand conditions; related and supporting industries; and firm
strategy, industry strategy and rivalry.
D. Strong sporting ethos; emphasis on individual achievement; strong national party in
power; large home market.
ANSWER: C
42. The five forces that affect the level of competition in an industry are
A. Threat of entrants; the power of buyers; the power of suppliers; the threat of
substitutes; competitive rivalry.
B. Threat of buyers; the power of entry; the power of substitutes; the threat of suppliers;
the threat of recession.
C. Threat of recession; the power of buyers; the power of suppliers; the threat of
management failure; competitive rivalry.
D. Threat of entry; the power of buyers; the power of suppliers; the threat of substitutes;
government action.
ANSWER: A
43. Which of the following statements in relation to the Five Forces framework is correct?
A. The framework assists in developing a broad perspective on the environment within
which an organisation is operating.
B. It is not appropriate in public sector management.
C. The framework is a means of identifying the forces which affect the level of competition
in an industry or sector.
D. The framework identifies the major stakeholders of an organisation.
ANSWER: C
44. In the Five Forces framework, the threat of entrants means

A. The possibility of an existing competitor capturing the entire market.
B. The possibility of an existing competitor withdrawing from the market.
C. The possibility of a new competitor entering the market.
D. The possibility of a potential competitor entering a different market.
ANSWER: C
45. Which of the following could be effective in preventing a potential competitor from
entering the market?
A. High capital costs.
B. Differentiation.
C. Retaliation.
D. Low switching costs for buyers.
ANSWER: A
46. The threat of substitutes may be high if

A. Switching costs are of concern to the customer.
B. The substitute product provides a higher perceived value or benefit.
C. The substitute product does not provide enhanced functionality, reduced cost and
better quality.
D. Customers have strong existing brand loyalty.
ANSWER: B
47. Buyers can exercise high bargaining power over their suppliers if
A. The volume they buy accounts for a large percentage of their suppliers’ sales.
B. There are few buyers in the market.
C. They have many suppliers to choose from.
D. There is a high concentration of suppliers.
ANSWER: A
48. Assessment of competitive rivalry does NOT include an understanding of

A. The extent to which competitors are in balance.
B. Market growth rates.
C. Fixed costs, exit barriers and operational efficiency.
D. The management structure of an organisation.
ANSWER: D
49. Strategic Groups are

A. A group of companies competing in the same industry.
B. Organisations in the same industry with similar characteristics and following similar
strategies.
C. Strategic Business Units (SBUs).
D. Organisations following similar strategies.
ANSWER: B
50. Market segmentation aims to

A. Identify the similarities and differences between groups of customers or users.
B. Identify the similarities between groups of customers or users.
C. Identify the differences between organisations and their competitors.
D. Identify the needs and wants of all customers or users.
ANSWER: A
51. What are the bases of market segmentation?

A. The business environment; the attractiveness of the market; the purchase/use
situation.
B. The strength of the competitors; the attractiveness of the market; the organisational
structure.
C. Strategic capabilities; organisational structure; organisational culture.
D. The characteristics of the people/organisations; the purchase/use situation; users’
needs and preferences for product characteristics.
ANSWER: D
52. Strategic gaps are

A. weaknesses in a company’s resources or competences.
B. Opportunities in the business environment not being fully exploited by the
competition.
C. Opportunities in the same market segment.
D. Opportunities in new market segments.
ANSWER: B
53. PEST is an acronym which stands for

A. duct, Economy, Society, Technology
B. Political, Economic, Societal, Technological.
C. Political, Economic, Social, Technological.
D. People, Economy, Standards, Transport.
ANSWER: C
54. Which of the following is not a major reactive motif for initiating export?
A. proximity to international customers/psychological distance
B. Competitive pressures.
C. Foreign market opportunities/market information.
D. Unsolicited foreign orders.
ANSWER: C
55. One of the following does not represent a general market risk in the
internationalization process
A. petition from other organizations in foreign markets
B. lack of tax incentives for organizations that export
C. language and cultural differences
D. complexity of shipping services to overseas buyers
ANSWER: A
56. The following represent major reactive motives for initiating export
A. ended sales of seasonal products.
B. competitive pressures
C. overproduction/excess capacity and unsolicited foreign orders
D. all of the above.
ANSWER: D
57. In which way do Japanese firms typically exploit foreign market opportunities?
A. using perceived-value pricing strategies.
B. by using psychological pricing strategies.
C. by using penetration pricing strategies.
Downloaded by Anshul Bhalla (bhallaanshul18@gmail.com)

D. through mass communication where their strengths in technological innovation are
emphasized.
ANSWER: C
58. According to the World Bank classification which of the following is not a high-income
economy?
A. Qatar.
B. Romania.
C. Austria.
D. Canada.
ANSWER: B
59. Which is the largest country within the EU by the size of the population?
A. Poland.
B. Germany.
C. United Kingdom.
D. France.
ANSWER: B
60. Approximately what per cent of the world income is found outside the United States
of America?
A. 30 per cent.
B. 40 per cent.
C. 75 per cent.
D. 90 per cent.
ANSWER: C
61. Which of the following is not a common form of tariffs?

A.Advalorem.
B. discriminatory.
C. specific.
D. quota.
ANSWER: B
62. A quick method that can help international marketers compare the relative value of
currencies is to check the price of a
A. Coke.
B. litre of petrol.
C. Snickers bar.
D. Big Mac.
ANSWER: D
63. An increase in the general level of prices, as measured against some baseline of
purchasing power is also known as
A. inflation.
B. recession.
C. deflation.
D. depression.
ANSWER: A
64. The European Union is an example of

A. monetary union.
B. free trade area.
C. common market.
D. economic union.
ANSWER: D
65. The economic System whereby the state holds broad powers to serve the public
interest, it decides what goods and services are produced and in what quantities and
demand typically exceeds supply is
A. Market socialism.
B. Market capitalism.
C. Centrally- planned socialism.
D. Centrally- planned capitalism.
ANSWER: C
66. Which of the following options contains the correct order from the lowest to highest
level of economic integration?
A. from economic area to a customs union to common market to free trade area.
B. from a customs union to economic union to free trade area to the common market.
C. from free trade area to a customs union to common market to economic union.
D. from a common market to free trade area to an economic union to the customs union.
ANSWER: D
67. Among the factors that affect the balance of trade figures are
A. exchange rates, taxes, tariffs and trade measures.
B. the business cycle at home or abroad.
C. trade barriers and agreements.
D. non-tariff barriers.
NSWER: A
68. Transfer of assets of a foreign firm to a domestic firm affected by the government with
payment of compensation is
A. Expropriation.
B. Appropriation.
C. Confiscation.
D. Domestication.
NSWER: A
69. Confiscation refers to the seizure of assets of a firm by

A. The government with adequate compensation.
B. The government without compensation.
C. Its rivals.
D. The people of the country.
ANSWER: B
70. Product liability law relates to

A. Holding the manufacturer responsible for the damages caused to the genuine user of the produ
B. Liability of the customer for illegitimate use of the product.
C. Liability of the seller for selling spurious goods.
D. Holding the manufacturer for advertising false information.
ANSWER: A
71. The globalisation of markets has brought about economies of

A. scale in production.
B. distribution and marketing.
C. management.
D. all business operations. ANSWER: D
72. Outsourcing of components is an example of the globalisation of

A. Production.
B. Marketing.
C. Purchase.
D. Production and marketing.
ANSWER: A
73. The following benefit is not expected from globalisation

A. Reaping the benefits of free trade.
B. Better quality of life through choice of product.
C. Better knowledge through compulsory education.
D. Dissemination of information through new information technology.
ANSWER: C
Q.1 which of the following is not related with Porter’s Diamond Model
1. Demand condition
2. Related and supporting industries
3. Industry strategy, structure and rivalry
4. Factor conditions
Q.2 the support activities in Porter’s value chain are which of the following
1. Infrastructure, HRM, procurement, sales and marketing

2. Technology, infrastructure, operations, HRM
3. Procurement, technology.HRM, infrastructure
4. Infrastructure, technology, operations, procurement
Q.3 According to Porter which of the following activity support the entire value chain:
1. Procurement
2. Operations
3. HRM
4. Infrastructure
Q.4 according to Porter, if an organization does not follow either a cost reduction strategy or product
differentiation strategy they are:
1. Hybrid
2. Incompetent
3. Question mark
4. Stuck in the middle
Q.5 In Porter’s Generic Strategies model, a focus strategy involves:
1. Selling limited products

2. Selling to a narrow customer segment
3. Selling to one region only
4. Selling products that have narrow use
Q.6. Find the odd one out:
1. Demand conditions
2. Government
3. Related industries
4. Factor conditions
Q.7 Kim Chan and Renee Mouborgne talks about an uncontested market place which is:
1. Red ocean
2. Blue ocean
3. Blue ocean strategy
4. Red ocean strategy
Q.8 Blue ocean strategy consist of four stages, the correct sequence is:
1. Eliminate, raise, create, reduce

2. Eliminate, reduce, create, raise
3. Eliminate, create, raise, reduce
4. Eliminate, reduce, raise, create
Q.9 In Porter’s Five Force model economies of scale, capital requirements, access to distribution channel,
latest technology are barriers to which of the following element:
1. Bargaining power of buyers

2. Threat of close substitutes
3. Competitive rivalry among firms
4. Threat of new entrants
Q.10 Polycentric approach is also known as
1. Host country approach

2. Home country approach
3. Global approach
4. Hybrid approach (both home and host)
Q.11. Farmers in an area, gather to form a cooperatives in order to sell their products to buyers directly,
replacing their previous middleman. This is an example of
1. Forward integration
2. Backward integration
3. Supplier power
4. Threat of entry
Q.12. The bargaining power of supplier is low compared to the buyer firm in case where:
1. There is a threat of new entrants

2. The firm has many suppliers
3. Supplier is only one in the industry
4. Volume of sales is high
Q.13. The bargaining power of buyer is high when:
1. The product is differentiated

2. The product is undifferentiated
3. They have little information
4. The buyer requires a high quality product
Q.14 Which strategy of Michael Porter states that the national home base of an organization with
specific factors, create competitive advantage on a global scale
1. Porter’s value chain 2.

2. Porters generic strategy
3. Porters diamond model
4. Porters Five force model
ANSWERS-
1. (2)Industry strategy, structure and rivalry

2. (3)Infrastructure, technology, operations, procurement
3. (4)Infrastructure
4. (4) Stuck in the middle
5. (2) Selling to a narrow customer segment
6. (2)Government
7. (2) Blue ocean
8. (4)Eliminate, reduce, raise, create
9. (4)Threat of new entrants
10. (1)Host country approach
11. (1) Forward integration
12. (2)The firm has many suppliers
13. (2)The product is undifferentiated
14. (3) Porters diamond model
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 these
Answer
Answer: (d) None of these
Question 2.
The document containing the guarantee of a bank to honour drafts drawn on it by an exporter is
(a) Letter of hypothetication
(b) Letter of credit
(c) Bill of lading
(d) Bill of exchange
Answer
Answer: (b) Letter of credit
Question 3.
A receipt issued by the commanding officer of the ship when the cargo is loaded on the ship is known
as
(a) Shipping receipt
(b) Mate receipt
(c) Cargo receipt
(d) Charter receipt
Answer
Answer: (b) Mate receipt
Question 4.
Which one of the following is not a document related to fulfill the customs formalities
(a) Shipping bill
(b) Export license
(c) Letter of insurance
(d) Proforma invoice
Answer
Answer: (d) Proforma invoice
Question 5.
Which of the following documents is not required in connection with an import transaction?
(a) Bill of lading
(b) Shipping bill
(c) Certificate of origin
(d) Shipment advice
Answer
Answer: (c) Certificate of origin
Question 6.
SMEs stands for:
(a) Small and Medium Entrepreneurs
(b) Small Management of Enterprises
(c) Small and Medium-sized Enterprises.
(d) Societies for Managing Exports
Answer
Answer: (c) Small and Medium-sized Enterprises.
Question 7.
MNC Stands for
(a) Multi-National Cooperation
(b) Multi-National Corporation
(c) Multi-National Company
(d) Multi-National Collaboration
Answer
Answer: (b) Multi-National Corporation
Question 8.
IPR stands for
(a) Intellectual property rights
(b) International property rights
(c) Internal promotion rights
(d) Interior promotional rights
Answer
Answer: (a) Intellectual property rights
Question 9.
WTO stands for
(a) World technology association
(b) World time organization
(c) World trade organization
(d) World tourism organization
Answer
Answer: (c) World trade organization
Question 10.
…..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
Answer
Answer: (a) GATT, WTO
Question 11.
…………………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
Answer
Answer: (a) Global
Question 12.
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.
Answer
Answer: (c) marketing activities and plans
Question 13.
Comparative Cost Trade Theory is given by
(a) Adam Smith
(b) David Ricardo
(c) Gottfried Haberler
(d) Heckscher Ohlin
Answer
Answer: (b) David Ricardo
Question 14.
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
Answer
Answer: (d) A more integrated and interdependent world
Question 18.
Subsidiaries consider the regional environment for policy / Strategy formulation is known as
(a) Polycentric Approach
(b) Regiocentric Approach
(c) Ethnocentric Approach
(d) Geocentric Approach
Answer
Answer: (b) Regiocentric Approach
Question 19.
Ultimately ………………was replaced by the …………….on 1st Jan 1995
(a) GATS, WTO
(b) WTO, GATT
(c) GATT, WTO
(d) IMF, GATT
Answer
Answer: (c) GATT, WTO
Question 20.
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
Answer
Answer: (a) World War I
Question 21.
Which of the following does not belong to the World Bank group?
(a) IBRD
(b) IDA
(c) MIGA
(d) IMF
Answer
Answer: (d) IMF
Question 22.
Which of the following document is prepared by the exporter and includes details of the cargo in terms
of the shipper’s 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’s receipt
(d) Bill of exchange
Answer
Answer: (d) Bill of exchange
Question 23.
Which one of the following is not a part of export documents?
(a) Commercial invoice
(b) Certificate of origin
(c) Bill of entry
(d) Mate’s receipt
Answer
Answer: (c) Bill of entry
Question 24.
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
Answer
Answer: (d) Refund of income dock charges at the port of shipment
Question 25.
Which of the following documents are not required for obtaining an export license?
(a) IEC number
(b) Letter of credit
(c) Registration cum membership certificate
(d) Bank account number
Answer
Answer: (b) Letter of credit
Multiple Choice Questions.

1. By entering into international business, a firm expects improvement in
A. marketing.
B. all spheres of marketing, operations and finance, simultaneously
C. any or all spheres of marketing, operations and finance.
D. finance only.
ANSWER: C
2. By having business in different countries, a firm reduces
A. credit risk.
B. political risk.
C. financial risk.
D. business risk.
ANSWER: B
3. The following is not an export intermediary
A. Export house
B. Trading house.
C. Manufacturer exporter
D. Merchant exporter
ANSWER: C
4. The mode of entering international business with least risk to the firm is
A. indirect exports.
B. direct exports
C. management contract.
D. turnkey projects.
ANSWER: A
5. Export management companies
A. act only as distributors of manufacturers
B. are responsible for executing the export order
C. may act as commission agents or distributors.
D. are domiciled in foreign country.
ANSWER: C
6. The following mode of business entry requires equity investment by the firm in a foreign venture
A. licensing.
B. franchising
C. turnkey projects.
D. joint venture.
ANSWER: D
7. Licensing arrangements is best suited for firms
A. having small capital base.
B. having exclusive intangible property right.
C. with huge liquid resources.
D. with financial difficulties.
ANSWER: D
8. Under franchising, production is done by
A. The franchisor.
B. The franchisee, according to his own standards.
C. The franchisee, with ingredients supplied by the franchisor.
D. The franchisee, in conformity with the standards set by the franchisor.
ANSWER: B
9. A joint venture cannot be established with
A. more than three participating firms.
B. participating firms from different countries.
C. government as a partner.
D. none of the above.
ANSWER: D
10. Wholly owned subsidiary can be set up
A. as a Greenfield venture.
B. to acquire an existing firm.
C. as a new venture or with an existing firm.
D. only when joint venture is not permitted.
ANSWER: D
11. Direct democracy is characterised by
A. citizens directly participating in the government of the state.
B. periodical elections for representatives.
C. police force in the private hands.
D. policy influenced by an individual.
ANSWER: A
12. The citizen right to freedom of expression and option is preserved in
A. representative democracy only.
B. all democracies.
C. direct democracy only.
D. democracy as well as totalitarianism.
ANSWER: B
13. Totalitarianism does not permit
A. practice of religion.
B. state worship of land.
C. freedom of expression to citizens.
D. recognition of citizenship to residents.
ANSWER: C
14. Theocratic totalitarianism refers to rule by
A. tribals.
B. foreign missionaries.
C. the military.
D. religious leaders.
ANSWER: D
15. Sanctions and embargoes differ in the following respect
A. Sanctions are against the individuals, embargoes are against nations.
B. Sanctions are specific trade restrictions; embargoes prohibit all business deals with another country.
C. Sanctions are general, embargoes are specific.
D. Sanctions are against a single country, embargoes are against all foreign countries.
ANSWER: B
16. Export control refers to restrictions on
A. Domestic firms from engaging in exports.
B. Items that can be exported from the country.
C. Foreign countries exporting to the country.
D. Domestic firms engaging in trade with nation
ANSWER: B
17. Indirect regulations affecting international business does not include
A. Export licensing.
B. Anti boycott regulations.
C. Anti trust laws.
D. Anti corruption laws.
ANSWER: A
18. Antiboycott regulations provide that
A. Domestic companies should not boycott any export order
B. Foreign companies should not boycott exports from the country.
C. Domestic companies should not comply with boycott regulations imposed by the importing country.
D. Trade should be liberal as provided under WTO charter.
ANSWER: C
19. Transfer of assets of a foreign firm to a domestic firm effected by the government with payment of
compensation is
A. Expropriation
B. Appropriation
C. Confiscation.
D. Domestication.
ANSWER: A
20. The compensation is paid on expropriation
A. At market rate.
B. At corresponding value in the home country of the firm.
C. Lower than market value.
D. On non-repatriable basis.
ANSWER: C
21. Confiscation refers to seizure of assets of a firm by
A. the government with adequate compensation.
B. the government without compensation
C. its rivals.
D. the people of the country.
ANSWER: C
22. Under domestication requirement
A. only the ownership of the firm is transferred to rivals.
B. the management of the firm is transferred to locals.
C. both ownership and management of the firm are transferred to locals immediately
D. both ownership and management of the firm are transferred to locals gradually.
ANSWER: D
23. The operating risk in the host country does not include the risk of
A. Change in government policies.
B. Exchange control.
C. Price controls.
D. Sanctions.
ANSWER: D
24. The political risk faced by a firm cannot be managed by
A. following ethical business practices
B. partnership with local firms.
C. insurance.
ANSWER: D
25. The legal system in India is based on
A. Common law.
B. Civil law.
C. Theocratic law.
D. Hindu law.
ANSWER: D
26. Judgments are based on detailed codes, rather than precedents under
A. Common law.
B. Civil law.
C. Theocratic law.
D. English law.
ANSWER: B
27. Theocratic law refers to
A. Islamic law.
B. Military law.
C. Law based on religious precepts.
D. Tribal law.
ANSWER: C
28. The following statement relating to civil law is true
A. The role of judges to interpret the law.
B. The role of judges to apply the law.
C. It is based on established practiced.
D. It is not applicable to criminal cases.
ANSWER: B
29. In international business cheaper alternatives to litigation is/ are
A. Conciliation.
B. Arbitration.
C. Negotiations.
D. Conciliation and arbitration.
ANSWER: B
30. A contract drafted under civil law differs from that drafted under common law in the following
respect
A. it will be detailed.
B. it will be shorter and less specific.
C. it will provide less severe damages.
D. it will be in detail.
ANSWER: B
31. Ownership of intellectual property is recognized in law by granting
A. Licenses.
B. Patents.
C. Copyrights.
D. Patent, copyright or trademark as appropriate.
ANSWER: D
32. Product liability law relate to
A. holding the manufacturer responsible for the damages caused to the genuine user of the product.
B. liability of the customer for illegitimate use of the product.
C. liability of the seller for selling spurious goods.
D. holding the manufacturer for advertising the false information.
ANSWER: A
33. Voluntary export restraint is
A. tariff barrier.
B. non- tariff barrier.
C. both tariff and non- tariff barrier.
D. not a trade barrier.
ANSWER: B
34. The objectives of import duty is/are
A. to raise income for the government.
B. to restrict imports.
C. to encourage exports.
D. to raise income and restrict imports.
ANSWER: D
35. Import tariff benefits
A. the consumers
B. domestic producers.
C. overseas suppliers.
D. the overseas producers.
ANSWER: B
36. Non- tariff trade barriers do not include
A. administrative regulations.
B. export subsidiaries
C. fiscal barriers.
D. quota.
ANSWER: B
37. The following is not a feature of globalisation
A. similar strategies are adopted by a firm in all markets.
B. only multinational firms engage in international business.
C. convergence of ideas and culture.
D. obliteration of national boundaries.
ANSWER: A
38. Globalisation of markets has brought about economies of
A. scale in production.
B. distribution and marketing.
C. management.
D. all business operations.
ANSWER: D
39. Outsourcing of components is an example of globalisation of
A. production.
B. marketing.
C. purchase
D. production and marketing.
ANSWER: A
40. The following benefit is not expected from globalisation
A. reaping the benefits of free trade.
B. better quality of life through choice of product.
C. better knowledge through compulsory education.
D. dissemination of information through new information technology.
ANSWER: C
41. Anti- globalisation has been voiced by
A. all developing countries.
B. only few developing countries.
C. supporters from both developing and developed countries
D. only developed countries
ANSWER: C
42. Computer programs are protected as
A. Copy rights
B. Trademarks.
C. Patents.
D. Industrial design
ANSWER: A
43. Geographical indications specifies
A. place of origin of goods.
B. special characteristics of the product associated with place of origin.
C. place and special characters of the product.
D. place or special characters of the product.
ANSWER: C
44. In India, the patent available for pharmaceuticals is
A. for product only.
B. for process only.
C. both for product and process
D. neither product nor process.
ANSWER: C
45. The degrading effect on the environment by MNCs is through
A. relocating production from developing to developed countries
B. relocating production from developed to developing countries.
C. flouting environmental laws.
D. relocation of distribution.
ANSWER: B
46. Which one of the following is true of the Chinese?
A. They pay to long standing close attention relationships.
B. 'They are very relaxed about time' and 'they prefer to work on a one-to-one basis' only.
C. They are very relaxed about time.
D. They prefer to work on a one-to-one basis.
ANSWER: C
47. TRIMs stands for
A. Trade Related Investment Measures.
B. Trade Review Information Modules.
C. Tripartite Review of Investment Means.
D. Trade Related Intellectual Measures.
ANSWER: A
48. The relation between the General Council and Dispute Settlement Body is
A. dispute Settlement body reports to General Council.
B. both report to Ministerial Conference.
C. both are same, functioning differently.
D. both have Trade Policy Review Body as the appellate body.
ANSWER: C
49. The final report of the Panel becomes the ruling in a dispute
A. if both the disputing countries agree.
B. if the report is accepted by majority of members.
C. if the report is accepted by all the members.
D. unless the report is rejected by consensus.
ANSWER: D
50. UNCTAD stands for
A. United Nations Council for Technical Development.
B. United Nations Conference on Trade and Development.
C. United National Census on Trade and Development.
D. United Nations Center for Technology and Development.
ANSWER: B
51. The Board of Trade is
A. a wing of the Board of Directors in companies engaged in foreign trade
B. the authority that appraises foreign investment in India.
C. a consultative and advisory body for the government of India on foreign trade policy.
D. an organization of exporters from India.
ANSWER: C
52. Commodity Boards do not differ from Export Promotion council in respect of the following
A. Commodity Boards deal with problems relating to production also.
B. Commodity Board is a statutory body.
C. Commodity Board covers a specific product.
D. Commodity Board offers consultative service.
ANSWER: C
53. The following organization does not specialize in training activity
A. Indian Institute of Foreign Trade.
B. Indian Trade Promotion Organisation.
C. Indian Institute of Packaging.
D. Federation of Indian Exports Organisation.
ANSWER: B
54. The Institution specializing in organizing fairs and exhibitions is
A. Indian Institute of Foreign Trade.
B. Federation of Indian Exports Organisation.
C. Indian Trade Promotion Organisations.
D. Trade Development Authority.
ANSWER: C
55. Funds allocated under ASIDE should be used for
A. developing infrastructure such as roads.
B. creation of free trade zone.
C. advertisement abroad.
D. conducting trade tours.
ANSWER: A
56. Market Development Assistance is available to
A. exporters with annual turnover upto Rs. 5 crore.
B. exporters with annual turnover upto Rs. 10 crore.
C. exporters with annual turnover above Rs. 10 crore.
D. all exporters.
ANSWER: A
57. Market Access Initiatives is not available for
A. conducting market studies
B. participation in international trade fairs.
C. testing charges for engineering products.
ANSWER: D
58. Unit in a technology park is not eligible for
A. exemption from import duty.
B. exemption from quantitative restrictions.
C. tax exemptions.
D. exemptions from registration requirements.
ANSWER: D
59. Special Economic Zones are
A. situated outside India, but subject to RBI control.
B. treated as foreign territory and not Indian laws.
C. governed by international and not Indian laws.
D. prohibited from buying from Domestic Tariff Area.
ANSWER: B
60. A SEZ cannot be established for
A. manufacture of goods.
B. rendering of services.
C. functioning as Free Trade and Warehousing Zone.
ANSWER: D
61. For establishing SEZ, approval of Board of Approval is not required if established by
A. Central Government.
B. Central and State government jointly.
C. State government.
D. Either Central or State Governement.
ANSWER: A
62. A co-developer of SEZ is
A. A joint developer.
B. A person or State Government approved to provide infrastructure facilities in SEZ.
C. Private party who joins with State government to establish the SEZ.
D. A person who joins with the Central Government.
ANSWER: B
63. Duty Drawback is available for
A. Import duty on imported components.
B. Central excise on indigenous components.
C. Import duty and central excise on indigenous components.
D. Import duty, central excise and VAT.
ANSWER: C
64. Excise duty exemption on exports is available for duty paid on
A. finished products only.
B. components only.
C. finished products and components.
D. imported items.
ANSWER: C
65. Advance authorization is not available for
A. physical exports.
B. service exports.
C. intermediate supplies.
D. deemed exports.
ANSWER: B
66. Import under the following scheme is subject to actual user condition even after fulfilment of export
obligation
A. Advance Authorisation.
B. Duty Free Import Authorisation.
C. Duty Entitlement Pass Book.
D. Duty Remission Scheme.
ANSWER: A
67. Export Promotion 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
68. Service from India scheme provides duty credit for exports under the category of
A. Hotel.
B. Health care.
C. Education.
D. All service providers with a foreign exchange earnings of at least Rs. 10 lakhs.
ANSWER: D
69. Regulatory documents for international trade includes
A. Shipping bill.
B. Bill of lading.
C. Marine insurance policy.
D. Proforma invoice.
ANSWER: A
70. A Bill of Lading is
A. a document of ownership to goods.
B. a non- negotiable instrument.
C. issued for goods carried by ship.
D. regulatory document.
ANSWER: C
71. For goods collected at the exporter premise and carried in containers, the transport document
issued is
A. bill of lading.
B. container bill of lading.
C. multi modal transport document.
D. seaway bill.
ANSWER: C
72. A bill of lading is prepared in more than one copy. Goods are delivered against
A. the first copy, if it is lost the next copy.
B. any copy, whichever is present first.
C. all copies, presented together.
D. proportionately against each copy.
ANSWER: B
73. GSP stands for
A. Goods Shipment Procedure
B. Generalized System of Payments.
C. Generalized System of Preferences.
D. Generalized Scheme for Payment.
ANSWER: C
74. Application for removal of excisable goods should be made in
A. Form A1.
B. ARE form.
C. GR form.
D. Excise form.
ANSWER: B
75. The following document is covered by Master Document I under standardized pre-shipment
documents
A. Bill of Exchange.
B. GR form.
C. Certificate of origin.
D. Shipping bill.
ANSWER: C
76. Price under the following incoterm will be the least
A. EXW.
B. FOB.
C. CIF.
D. DDP.
ANSWER: A
77. The exporter need not obtain the marine insurance under the following incoterm
A. CIF.
B. CIP.
C. DDP.
D. DDU.
ANSWER: C
78. Shipping order refers to
A. permission by the customs to load the goods into the vessel.
B. Exporter order to the captain of the vessel to take the goods.
C. the sequence in which the goods are to be loaded into the vessel.
D. an acknowledgement by the shipping company for having booked the shipping space.
ANSWER: D
79. The application to the Customs to clear the goods for export is made in
A. Shipping bill.
B. Shipping request.
C. ARE form.
D. Bill of exit.
ANSWER: A
80. The importability or otherwise of a specified commodity into India is determined by
A. Foreign trade (Regulation ) Rules Act.
B. Foreign Trade (Regulation and Development) Act.
C. Imports and Exports (Control) Act.
D. Foreign Trade (Exemption) Rules Act.
ANSWER: B
81. An airway bill is prepared in
A. two copies.
B. three copies.
C. four copies.
D. five copies.
ANSWER: B
82. An application for customs clearance of import cargo is
A. Bill of lading.
B. Bill of exchange.
C. Shipping bill.
D. Bill of Entry.
ANSWER: D
83. ECGC policies provide exporters cover against
A. general risk.
B. commercial risk.
C. political risk.
D. commercial and political risk.
ANSWER: D
84. The minimum land requirement for a SEZ for multi- product is
A. 500 hectares.
B. 1000 hectares.
C. 1500 hectares.
D. 2000 hectares.
ANSWER: A
85. Terrorism in the host country is a
A. ownership risk.
B. operating risk.
C. transfer risk.
D. general risk.
ANSWER: B
86. Case law is the other name for
A. code law.
B. common law.
C. civil law.
D. criminal law.
ANSWER: B
87. Tariffs levied as a percentage of the value of the product is a
A. specific duty.
B. ad valorem duty.
C. anti dumping duty.
D. countervailing duty.
ANSWER: B
88. The duty levied to counteract foreign suppliers
A. specific duty.
B. ad valorem duty.
ANSWER: C
89. The duty levied to nullify the effect of export subsidies is
A. specific duty.
B. ad valorem duty.
ANSWER: D
90. Computer programs are protected as
A. Copy rights.
B. Trademarks.
C. Patents.
D. Industrial design.
ANSWER: A
91. Geographical indications specifies
A. Place of origin of goods.
B. Special characteristics of the product associated with place of origin.
C. Place and special characters of the product.
D. Place or special characters of the product.
ANSWER: C
92. In India, the patent available for pharmaceuticals is
A. for product only.
B. for process only.
C. both for product and process.
D. neither product nor process.
ANSWER: C
93. The exclusive legal right of authors. Composers, play writes, artists and publishers to publish and
disperse
their works is
A. patent.
B. trade mark.
C. copy right.
D. Technology.
ANSWER: C
94. The Paris Convention for the Protection of Industry Property was dated
A. 1783.
B. 1883.
C. 1983.
D. a. 2003.
ANSWER: A
95. The transfer of the ownership of state property into the hands of the private individuals by the sale
of state assets through auction is
A. Privatization.
B. Liberalization.
C. Globalization.
D. Domestication.
ANSWER: A
96. MFN is an acronym of
A. Most Favorable Nations.
B. Most Favored Nations.
C. Most Fortune Nations.
D. Most Fastest Nations.
ANSWER: B
97. The relation between TRIPS and WIPO conventions is
A. WIPO conventions are more valid.
B. TRIPS agreement excludes subjects covered by WIPO conventions.
C. TRIPS agreement is subordinate to WIPO conventions.
D. TRIPS agreement incorporates substantive provisions of WIPO conventions.
ANSWER: D
98. The leading continent in international trade in IT products is
A. Asia.
B. Europe.
C. America.
D. Africa.
ANSWER: A
99. The origin of Common law is in
A. America.
B. England.
C. Russia.
D. India.
ANSWER: B
100. The law system practices in Japan is
A. Common law.
B. Code law.
C. Civil law.
D. Religious law.
ANSWER: A
101. Import of capital goods under EPCG scheme is subject to
A. Terms and conditions of agreement.
B. Conditions of law of exporting country.
C. Actual user condition.
D. Conditions of law of importing country.
ANSWER: C
102. The export proceeds shall be realized in
A. Any foreign currency.
B. Non- convertible currency.
C. Convertible currency.
D. Home currency only.
ANSWER: C
103. The export promotion scheme that enables the post export replenishment of duty on inputs used
in the
export product is
A. Replenishment licence.
B. Duty remission scheme.
C. Duty exemption scheme.
D. Duty free replenishment certificate.
ANSWER: B
104. The import of inputs used in the manufacture of export product is permitted without payment of
the basic
customs duty under
A. Replenishment licence.
B. Duty remission scheme.
C. Duty exemption scheme.
D. Duty free replenishment certificate.
ANSWER: D
105. In the basic formula for the calculation of Value Addition, A stands for
A. FOB value of the export realized/ FOR value of supply received.
B. CIF value of imported inputs covered by the licence.
C. CIF value of the export realized/ FOR value of supply received.
D. FOB value of imported inputs covered by the licence.
ANSWER: A
106. In the basic formula for the calculation of Value Addition, B stands for
A. FOB value of the export realized/ FOR value of supply received.
B. CIF value of imported inputs covered by the licence.
C. CIF value of the export realized/ FOR value of supply received.
D. FOB value of imported inputs covered by the licence.
ANSWER: B
107. The export promotion scheme with the objective to neutralize the incidence of Customs duty on
the
import content of the export product is
A. Export Promotion Capital Goods.
B. Export Credit Guarantee.
C. Duty Free Replenishment.
D. Duty Entitlement Passbook.
ANSWER: D
108. The licence that is transferable is
A. Export licence.
B. Advance licence.
C. DEPB licence.
D. REP licence.
ANSWER: C
109. The exporters of gems and jewellery are eligible to import their inputs by oblaining
A. Export licence.
B. Advance licence.
C. DEPB licence.
D. REP licence.
ANSWER: D
110. The commonly used type of Letter of Credit is
A. Revocable.
B. Irrevocable.
C. Confirmed.
D. Unconfirmed
ANSWER: B
111. The terms of payment where the documents is released to the importer on payment only is
A. Documents against acceptance.
B. Documents against payment.
C. Bill of exchange.
D. Sight bill.
ANSWER: B
112. RCMC is the acknowledgement for the registration with
A. Export Promotion Council.
B. Commodity Board.
C. State Trading.
D. Chamber of Commerce.
ANSWER: A
113. The authorized person for the decision regarding the penalty for the violation of foreign trade rules
is
A. Competent authority.
B. Adjudicating authority.
C. Appellate authority.
D. Director General of Foreign Trade.
ANSWER: B
114. The person authorized to whom the appeal against the order is made is
ANSWER: C
115. The Central Government frames the foreign trade rules along with the assistance of
ANSWER: D
116. The Imports and Exports (Control) Act came into enforcement from
A. 1947.
B. 1948.
C. 1951.
D. 1955.
ANSWER: A
117. The act which came into force in the year 1955 was
A. The imports and Exports (Control) Act.
B. The Export Policy Resolution.
C. The Exports (Control) Act.
D. The imports (Control) Act.
ANSWER: D
118. The IEC number is issued by the
B. State Government.
C. Director General of Foreign trade.
D. Ministry of commerce.
ANSWER: C
119. The IEC number is a number with
A. 7 digits.
B. 8 digits.
C. 9 digits.
D. 10 digits.
ANSWER: D
120. The Director General of Foreign trade is appointed by
B. State Government.
C. Ministry of commerce.
D. Chief justice of the Supreme Court.
ANSWER: A
121. The Code of Criminal Procedure was passed in the year
A. 1953.
B. 1963
C. 1973
D. 1983
ANSWER: C
122. The unpaid penalty under the Foreign Trade act will be collected as
A. arrear in land revenue.
B. arrear in tax.
C. arrear in duty.
D. arrear in wealth tax.
ANSWER: A
123. The penalty under the foreign trade act shall not exceed
A. Rs. 1000.
B. Rs. 2000.
C. Rs.3000.
D. Rs. 5000.
ANSWER: A
124. The appeal against the order or decision is to be made to the concerned authority within
A. 30 days from the order being passed.
B. 45 days from the order being passed.
C. 60 days from the order being passed.
D. 180 days from the order being passed.
ANSWER: B
125. The Code of Civil Procedure was enforced in the year
A. 1908.
B. 1918.
C. 1928.
D. 1938.
ANSWER: A
126. The revision of the decision made under the Foreign trade act is possible with in
A. one year.
B. 2 years.
C. 3 years.
D. 5 years.
ANSWER: B
127. Monetary policy relates to controlling
A. money supply.
B. money supply and interest rate.
C. money supply, interest rate and exchange rate.
D. credit creation by banks.
ANSWER: C
128. 128. To arrest and reverse the declining trend of exports and to provide additional support
especially to
those sectors which have been hit badly by recession in the developed world is the short objective of
A. 1992- 2002 policy.
B. 2002-2007 policy.
C. 2004- 2009 policy.
D. 2009-2014 policy.
ANSWER: D
129. To encourage value addition in manufactured exports and towards this end, the stipulated a
minimum
value addition on imported inputs under advance authorization scheme is
A. 10 per cent.
B. 12 per cent
C. 15 per cent.
D. 17 per cent.
ANSWER: C
130. The incentive available under Focus Market Scheme (FMS) is
A. 1.5 to 2 per cent.
B. 2 to 2.5 per cent.
C. 2.5 to 3 per cent.
D. 3 to 3.5 per cent.
ANSWER: C
131. The incentive available under Focus Product Scheme (FPS)
A. 1.5 to 2 per cent.
B. 2 to 2.5 per cent.
C. 2.5 to 3 per cent.
D. 3 to 3.5 per cent.
ANSWER: B
132. To double India's percentage share of global merchandise trade is the objective of
A. 1992- 2002 policy.
B. 2002-2007 policy.
C. 2004- 2009 policy.
D. 2009-2014 policy.
ANSWER: C
133. The increased per cent of duty free entitlements of import trimmings, embellishments and
footwear
components for leather industry as per the 2004- 2009 policy is
A. 2 per cent of FOB value.
B. 3 per cent of FOB value.
C. 5 per cent o FOB value.
D. 7 per cent of FOB value.
ANSWER: B
134. The increased per cent of duty free import of trimmings and embellishments for Handlooms &
Handicrafts sectors as per the 2004- 2009 policy is
A. 2 per cent of FOB value.
B. 3 per cent of FOB value.
C. 5 per cent of FOB value.
D. 7 per cent of FOB value.
ANSWER: C
135. As per the Target Plus scheme, For incremental growth of over 20 per cent the duty free credits
would
be
A. 5 per cent of FOB value of incremental exports
B. 10per cent of FOB value of incremental exports
C. 15per cent of FOB value of incremental exports.
D. 20 per cent of FOB value of incremental exports.
ANSWER: B
136. 133. As per the Target Plus scheme, For incremental growth of over 25 per cent the duty free
credits
would be
ANSWER: C
137. As per the Target Plus scheme, For incremental growth of over 100 per cent the duty free credits
would
be
ANSWER: A
138. 133. The foreign Trade (Regulation) Rules was passed in the year
A. 1991.
B. 1992.
C. 1993.
D. 1994.
ANSWER: B
139. 133. The Customs Act was enforced in the year
A. 1962.
B. 1964.
C. 1978.
D. 1992.
ANSWER: C
140. Exports and Imports come under the purview of
A. Ministry of Finance
B. Ministry of Commerce
C. Ministry of External Affairs
D. Ministry of Home Affairs
ANSWER: A
141. 141. Which one of the following is not a cause but a consequence of Globalisation?
A. Integration of Markets
B. Technology and know-how
C. Greater institutionalization abroad
D. Greater Risk Exposure
ANSWER: B
142. Basel Committee on Banking Supervision is also known as
A. BIS Committee
B. Bank for International Settlements Committee
C. Peter Cooke Committee
D. Banking Regulation Committee
ANSWER: D
143. Which one of the following systems occurred first in the history of international banking?
A. Post Bretton Woods.
B. European Monetary Union
C. Gold Standard
D. Gold Exchange Standard
ANSWER: D
144. 144. State Bank of India is maintaining account in Japanese Yen with American Express Bank,
Tokyo. It
is known as
A. Vostro account.
B. Nostro account.
C. Loro account.
D. Escrow account.
ANSWER: C
145. Which one of the following is not an approved manner of payment for exports as per FEMA 1999
on
Exports?
A. Bank Draft, pay order, bankers, cheque or personal cheques
B. FC Notes/F. T/Cs from the buyer during his visit to India
C. a. Payment out of funds held in the FCNR/NRE account maintained by the buyer
D. a. Precious metals i.e. Gold/Silver/Platinum by Gems & Jewellery Units in SEZs and 100% EOUs in
equivalent value of jewellery exported subject to fulfillment of certain conditions.
ANSWER: B
146. . If a country is having more exports than imports in value terms, it can be said that the country is
having
A. Deficit under BOP.
B. Deficit under BOT.
C. Surplus under BOT.
D. Surplus under BOP.
ANSWER: D
147. Which one of the following is not a part of institutions under Bretton Woods System?
A. IMF.
B. IBRD( World Bank).
C. IFC.
D. BIS.
ANSWER: D
148. 148. Which one of the following is not a source of fund available to banks Pre-shipment Credit In
Foreign Currency ( PCFC) Scheme?
A. EEFC A/c.
B. NRE A/c.
C. RFC A/c.
D. Escrow A/c.
ANSWER: D
149. Which of the following is not true regarding an AWB?
A. It is prima facie evidence of receipt of cargo.
B. It is a document of title to goods.
C. The date of dispatch indicated on the AWB will be deemed to be the date of shipment.
D. AWB serves as an instruction sheet giving all the instruction needed for moving the goods.
ANSWER: C
150. Which of the following statement is correct?
A. Foreign Exchange markets are localized markets.
B. Foreign Exchange markets operate within a country time zone.
C. Foreign Exchange markets are dynamic and round the clock markets.
D. Foreign Exchange markets are used only for trade related transactions.
ANSWER: B
151. Domestic sale contract in the US are controlled by the body of law know as
A. Convention on the International Sale of Goods.
B. Uniform Commercial code.
C. Domestic Contract Code.
D. Uniform Contract Code.
ANSWER: B
152. The almost universal adoption of the International Chamber of Commerce Incoterms and Uniform
Customs and Practices for Documentary Credits points to the growth of
A. International Treaty law.
B. Customary International business law.
C. International Commercial Jurisprudence.
D. Convention driven international business law.
ANSWER: B
153. The effort to unify international sales law was significantly enhanced by the ratification of
A. The ICCs Incoterms.
B. The ICCs Uniform Customs and Practices for Documentary Credit.
C. The UN Convention on Contracts for the International Sale of Goods.
D. The UN Convention on International Sales Contract.
ANSWER: D
154. Development in international law is process. What does this process promote?
A. Mainly human development.
B. Mainly economic development.
C. Mainly social development.
D. Mainly political development.
ANSWER: B
155. Why is sustainable development a principle of paramount importance in international law?
A. Because it promotes world peace
B. Because it is a principle which did not exist before
C. Because it is a principle recognised by the International Court of Justice as well as bumber of
leading international organisations
D. Because non-governmental organisations support this principle
ANSWER: C
156. The court use which of the following to extend contractual liability to protect someone who
reasonably
relied that the parties would conclude a final agreement
A. Guarantee theory.
B. Assurance theory.
C. Reliance theory.
D. Promissory theory.
ANSWER: D
157. In the civil law, pre- contractual liability premised on the implied duty of the parties to act in good
faith
during the negotiations of a contract is known as
A. Culpa in contrahendo.
B. Contra proferentem.
C. Contract of honor.
D. Promissory estoppel.
ANSWER: A
158. The initial guiding principle behind the formation of GATT was
A. Free trade through reduction of tariff worldwide.
B. Free trade through the establishment of regional trading groups.
C. Free trade through the harmonious law in the industrial countries.
D. Free trade through the development of the less industrialized nations.
ANSWER: A
159. The three foundational principle of the GATT includes
A. Most favoured nations, national treatment principle, principle of transperancy.
B. Most favoured nation, non- discrimination principle, principle of transperancy.
C. National treatment principle, non- discrimination principle, principle of transperancy.
D. Most favoured nation, non- discrimination principle, principle of transparency.
ANSWER: D
160. A tariff is
A. a complete ban on trade with a nation.
B. a ban on the importation of certain products from a nation.
C. an import duty.
D. a tax on goods being imported into a country.
ANSWER: D
161. As a dispute resolution device, mediation refers to the process whereby
A. two parties in a dispute agree to binding arbitration.
B. Two parties in the dispute attempt to find a mutually satisfactory solution through use of third party.
C. a. Two parties in a dispute agree to have their case heard by a mutually agreed up court.
D. b. two parties in a dispute agree to binding understanding.
ANSWER: B
162. When a foreign company exports and sells below the market price, it is known as
A. subsidies.
B. Countervailing measures.
C. Dumping.
D. Punitive barriers.
ANSWER: C
163. International trade disputes handled by the WTO under the auspices of the
A. International Court of Justice.
B. Dispute Settlement Body.
C. International Chamber of Commerce Arbitration Panel.
D. World Court.
ANSWER: D
164. All of the following are fundamental factors used by the countries to determine the customs duties
to be
paid for importing goods except
A. Country of origin.
B. Classification.
C. Valuation.
D. Markings.
ANSWER: D
165. The uniform classification system adopted by most countries to classify goods in international
trade is
A. Harmonised commodity description.
B. Harmonised tariff schedule.
C. Harmonised coding system.
D. Harmonized classification schedule.
ANSWER: A
166. Foreign goods placed into which of the following are exempt from duties until officially entered
into
countrys stream of commerce
A. Free trade zone.
B. Bonded warehouse.
C. Private warehouse.
D. Free port.
ANSWER: C
167. Which of the following is NOT protected by copyright?
A. Literary works.
B. Music.
C. Ideas and thoughts.
D. Typological arrangements of published editions.
ANSWER: A
168. In cases of literary and dramatic works, for how long will copyright exist?
A. 70 years after the end of the calendar year of the death of the person who created it.
B. 50 years after the end of the calendar year of the death of the person who created it.
C. 125 years after the end of the calendar year of the death of the person who created it.
D. 25 years after the end of the calendar year of the death of the person who created it.
ANSWER: D
169. Protection under the Registered Design Act 1949 exists for a period of:
A. 5 years (renewable).
B. 10 years (renewable).
C. 15 years.
D. 25 years.
ANSWER: C
170. In relation to the sporting goods manufacturer 'Nike,' its 'swoosh' is an example of
A. Copyright.
B. Design right.
C. Trade mark.
D. Patent.
ANSWER: A
171. Which of the following will be allowed a patent to be applied?
A. A new invention (such as a vacuum cleaner).
B. An artistic work.
C. The presentation of information.
D. A form of doing business.
ANSWER: A
172. Which of the following is NOT an example of an infringement of a patent?
A. Where the invention is a product, the person makes, disposes of, offers to dispose of, uses or
imports
the product or keeps it whether for disposal or otherwise.
B. Where the invention is a process, the person uses it, or offers it for use in the uk knowing (or
reasonably
ought to have known) that its use there without the consent of the proprietor would constitute an
infringement.
C. Where the invention is a process, the person disposes of, offers to dispose of, uses or imports any
product obtained directly by means of that process or keeps any such product whether for disposal or
otherwise.
D. Where the invention is performed for research.
ANSWER: D
173. In relation to patents, where an employee creates an invention during the normal course of
employment
and it relates to his/her duties at work, the intellectual property belongs to which of the following?
A. The employee.
B. It depends on the specific nature of the employment contract.
C. The board of directors (if applicable).
D. The employer.
ANSWER: D
174. Which of the following is an example of intellectual property?
A. Computer hardware.
B. Trademarks.
C. Textiles.
D. Electronics equipment.
ANSWER: B
175. Negotiations about intellectual property rights are most important to
A. India.
B. US.
C. The Czech republic.
D. . Russia.
ANSWER: B
176. The General Agreement on Tariff and Trade was replaced by
A. Cross Border Trade Group.
B. North American Free Trade Agreement.
C. Mutlilateral Agreement.
D. World Trade Organisation.
ANSWER: D
177. Trade in services includes which of the following?
A. Textiles.
B. Computer hardware.
C. Weapons.
D. Insurance.
ANSWER: D
178. _____________ emphasies conflicting interests in economic exchanges.
A. Merchantilism.
B. Neorealism.
C. Liberalism.
D. Keynesian economics.
ANSWER: A
179. In a centrally planned economy,
A. Government official set prices.
B. Supply and demand is key indicators of prices and production levels.
C. Business leaders set production quotas and report them to government, which holds them
accountable.
ANSWER: A
180. Common market imperfections in international trade include
A. Taxation.
B. Corruptions.
C. Sanctions.
ANSWER: A
181. A new entry into an industry sector that is mature in other states and, therefore, is often protected
by its
government is a
A. venture capital.
B. Infant firm.
C. Service industry.
D. Start up firm.
ANSWER: A
182. Which of the following is an example of portfolio investment?
A. buying stocks and bonds.
B. Paying subsidies.
C. Lowering tariff barriers.
D. Building a factory.
ANSWER: A
183. The state in which an MNC has its headquarters is called the
A. host state.
B. Home state.
C. Source state.
D. Export state.
ANSWER: B
184. Which of these groups welcomes the free trade that comes with globalization?
A. human rights NGOs.
B. Environmental groups.
C. Workers in industrialized countries.
ANSWER: D
185. Foreign investments in and by a country are referred to as
A. the capital account.
B. capital flows.
C. government transactions.
D. the current account.
ANSWER: B
186. A ________ is responsible for maintaining the value of a state's currency to the extent that it can by
limiting the amount of money printed and avoiding inflation.
A. Discount rate.
B. Central bank.
C. Regulatory commission.
D. Fiscal policy.
ANSWER: B
187. Almost all MNCs are based in
A. Latin America.
B. G- 8 states.
C. Japan.
D. Africa.
ANSWER: B
188. ______________ involves tangible goods such as factories and office buildings that cannot be traded
and moved freely like paper invesments.
A. Foreign Direct investment.
B. Currency investment.
C. Fiduciary investment.
D. Portfolio investment.
ANSWER: A
189. A unilateral move to reduce the value of one's own currency by changing a fixed or official
exchange rate
is known as
A. Reduction.
B. Devaluation.
C. Revaluation.
D. Restructuring.
ANSWER: C
190. A tax imposed on certain type of imported goods is
A. a tariff.
B. a surcharge.
C. a severance tax.
D. a subsidy.
ANSWER: A
191. "Autarky" is (are)
A. interdependence.
B. state- sponsored. sanctions.
C. self- reliance.
D. market oriented.
ANSWER: C
192. Foreign exchange transactions involve monetary transactions
A. among residents of the same country.
B. between residents of two countries only.
C. between residents of two or more countries.
D. among residents of at least three countries.
ANSWER: C
193. Which of the following statements is true?
A. There is no link between foreign trade and foreign exchange.
B. Foreign exchange leads to foreign trade.
C. Foreign trade leads to foreign exchange.
D. No foreign exchange is involved in foreign trade.
ANSWER: C
194. A foreign currency account maintained by a bank abroad is its
A. Nostro account.
B. Vostro account.
C. Loro account.
D. Foreign bank account.
ANSWER: A
195. The number of nostro accounts that can be maintained by a bank in a particular currency is
A. one.
B. not exceeding three.
C. minimum two.
D. no such limit.
ANSWER: D
196. 'Non-resident Bank Accounts' refer to
A. Nostro account.
B. Vostro account.
C. Accounts opened in offshore centres.
D. Foreign bank account.
ANSWER: B
197. Non-resident bank accounts are maintained in
A. the permitted currencies.
B. the currency of the country of the bank maintaining the account.
C. the currencies in which FCNR accounts are permitted to be maintained.
D. Indian rupee.
ANSWER: D
198. Full fledged money changers are authorized to undertake
A. only sale transactions.
B. only purchase transactions.
C. all types of foreign exchange transactions.
D. purchase and sale of foreign currency notes, coins and travelers cheques.
ANSWER: D
199. The market forces influencing the exchange rate are not fully operational under
A. floating exchange rate system.
B. speculative attack on the market.
C. fixed exchange rate system.
D. current regulations of IMF.
ANSWER: B
200. According to classification by IMF, the currency system of India falls under
A. managed floating.
B. independently floating.
C. crawling peg.
D. pegged to basket of currencies.
ANSWER: A
201. Under the original scheme IMF, a member country had to obtain the permission of IMF for
A. any devaluation of its currency.
B. any devaluation or revaluation of its currency .
C. devaluation of its currency at a time exceeding 10%.
D. devaluation of its currency exceeding cumulatively 10%.
ANSWER: A
202. The Foreign Trade policy was first introduced in the year
A. 1981.
B. 1947.
C. 1992.
D. 2000.
ANSWER: C
203. The present share of India's trade in the world trade is
A. less than 1 per cent.
B. 1.2 per cent.
C. 2 per cent.
D. 3 per cent.
ANSWER: D
204. The apex body of the Foreign Trade is
A. The Central Government.
B. The State Government.
C. The Ministry of Commerce.
D. All the above.
ANSWER: C
205. The tenure of the Foreign Trade policy is
A. 3 years.
B. 5 years.
C. 1 year.
D. 7 years.
ANSWER: B
206. Vishesh Krishi and Gram Udyog Yojana is a scheme under
A. Leather industry.
B. Cottage industry.
C. Gems and Jewellery.
D. Agricultural industry.
ANSWER: D
207. 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
208. The customs duty paid for the import of capital goods as per 2009-2014 policy is
A. 2 per cent.
B. 3 per cent.
C. 5 per cent.
D. 8 per cent.
ANSWER: C
209. The Imports and Exports (Control) Act was passed in the year
A. 1947.
B. 1977.
C. 1992.
D. 1955.
ANSWER: A
210. How many chapters are there in The Foreign Trade (Development and Regulation) Act, 1992?
A. 5
B. 4
C. 6
D. 7
ANSWER: C
211. The period of time permitted for the fulfillment of the export obligation under EPCG is
A. 5 years.
B. 8 years.
C. 7 years .
D. 10 years.
ANSWER: B
212. 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
213. The total number of functional SEZs in India is
A. 5
B. 7
C. 8
D. 10
ANSWER: C
214. Islamic nations follow
A. Common law.
B. Civil law.
C. Criminal Law.
D. Religious law.
ANSWER: D
215. What does CCIE stand for?
A. Chief Controller of Imports and Exports.
B. Central Cottage Industries Exports.
C. Control on Cotton Imports and Exports.
D. Commissioner of Central Imports and Exports.
ANSWER: A
216. Bill of Lading is issued by the
A. captain of the vessel.
B. shipping company.
C. customs authorities.
D. consignor.
ANSWER: B
217. The document used in the operation of tramp vessel is
A. Charter party.
B. Bill of Lading.
C. Bill of Entry.
D. Bill of exchange.
ANSWER: A
218. 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
219. The Warsaw Convention on the International Air transport was announced in
A. 1929.
B. 1934.
C. 1955.
D. 1972.
ANSWER: A
220. The process of acquiring technology from other country is called
A. Licensing.
B. Franchising.
C. Technology Transfer.
D. Joint Venture.
ANSWER: C
221. "Reverse Engineering" method of Technology Transfer is also called as
A. FDI.
B. Strategic Alliance.
C. Licensing.
D. Capital Goods trade.
ANSWER: D
222. The apex body of the Export Promotion organizations is
A. EPC.
B. Commodity Boards.
C. FIEO.
D. IIFT.
ANSWER: C
223. The EXIM policy 2002-2007 coincides with the
A. 7th Five year plan.
B. 8th Five year plan.
C. 9th Five year plan.
D. 10th Five year plan.
ANSWER: D
224. The cash subsidy scheme designed to compensate the exporters for rebated indirect taxes is
A. Duty drawback.
B. Duty Exemption.
C. Duty Remission.
D. Cash Compensatory Support.
ANSWER: D
225. The area where the goods are permitted to be imported and reexported without any processing in
the
same form is called
A. Export Processing Zone.
B. Free Trade Zone.
C. Special Economic Zone.
D. Agri Export Zone.
ANSWER: B
226. India's first Free Trade Zone is
A. Santa Cruz.
B. Kandla.
C. Noida.
D. Falta.
ANSWER: A
227. The components of Balance of Payment includes
A. Current and Capital Account.
B. Current account and official reserves.
C. Capital Account and Official reserves.
D. Current account, capital account and official reserves.
ANSWER: D
228. The total value of the products and services marketed by a nation is called
A. Gross Domestic Product.
B. Gross National Product.
C. National Income.
D. Per capita income.
ANSWER: A
229. The legal settlement of international trade disputes is
A. Negotiation.
B. Arbitration.
C. Litigation.
D. Conciliation.
ANSWER: C
230. The statement by a manufacturer or seller concerning a product during a commercial transaction
is called
as
A. Warranty.
B. Guarantee.
C. Lien.
D. Liability.
ANSWER: A
231. To what extent is FDI permitted in the FTWZ?
A. 50%
B. 60%
C. 75%
D. 100%
ANSWER: D
232. The certificate issued for the registration under Export Promotion Council is called
A. Registration Cum Membership Certificate.
B. Permanent Account Number.
C. Importer Exporter Code.
D. ITC number.
ANSWER: A
233. The exports made by an exporter or manufacturer on behalf of another exporter(s) are called
A. Registered Exporter.
B. Manufacturer Exporter.
C. Merchant Exporter.
D. Third Party Exporter.
ANSWER: D
234. The permitted limit of DTA sale as per the recent policy of Foreign Trade policy is
A. 5%.
B. 10%.
C. 25%.
D. 50%.
ANSWER: D
235. What is the permitted age limit for the import of second hand capital goods under EPCG scheme?
A. No age limit.
B. Minimum one year.
C. 2 years.
D. 3 years.
ANSWER: A
236. What is the permitted age limit for the import of second hand capital goods under EPCG scheme?
A. No age limit.
B. Minimum one year.
C. 2 years.
D. 3 years.
ANSWER: A
237. In the calculation of Value Addition under duty exemption scheme, 'A' represents
A. FOB value of the export realised /FOR value of supply received.
B. CIF value of the imported inputs.
C. CIF value of the export realized.
D. FOB value of the imported inputs.
ANSWER: A
238. A premier international trading house owned by the Government of India set up in 1956 is
A. Minerals and Metals trading Corp.
B. State Trading Corp.
C. Mica Trading Corp.
D. Handlooms and Handicrafts Export Council.
ANSWER: B
239. Tea Board is headquartered at
A. New Delhi.
B. Kolkatta.
C. Bengaluru.
D. Kerala.
ANSWER: B
240. The nodal agency of the Government of India for promoting the country's external trade is
A. Indian Trade Promotion Organisation.
B. Indian Institute of Foreign Trade.
C. Federation of Indian Exports.
D. Trade Development Authority of India.
ANSWER: A
241. Foreign Exchange Regulation Act was replaced with The Foreign Exchange Management Act in the
year
A. 1973.
B. 1991.
C. 1995.
D. 1999.
ANSWER: D
242. The WTO Agreement related to investment measures is
A. TRIPS.
B. TRIMS.
C. GATS.
D. TCA.
ANSWER: B
243. The common types of Intellectual property include
A. Copyrights and trademarks.
B. Patents and industrial design rights.
C. Trade Secrets.
ANSWER: D
244. The insurance policy that covers exporters against commercial and political risk is
A. General insurance.
B. ECGC.
C. Marine insurance.
D. Fire insurance.
ANSWER: B
245. The penalty for the contravention of foreign trade rules is decided by
A. The Appellate authority.
B. The Adjudicating authority.
C. The Competing authority.
D. The Regional Licensing Authority.
ANSWER: B
246. The export promotion scheme that neutralizes the customs duty on the import content of the
export
product is
A. DEPB.
B. Duty Drawback.
C. Duty Exemption.
D. Duty Remission.
ANSWER: A
247. Market Access Initiatives is not available for
A. conducting market studies.
B. participating in international trade fairs.
C. testing charges for engineering products.
ANSWER: D
248. Duty drawback is available for
A. import duty on imported components.
B. central excise on indigenous components.
C. both (i) and (ii) above.
D. (iii) above and VAT.
ANSWER: C
249. Confiscation refers to seizure of assets of a firm by
A. the government with adequate compensation.
B. the government without compensation
C. its rivals
D. the people of the country.
ANSWER: B
250. Antiboycott regulations provide that
A. domestic companies should not boycott any export order.
B. foreign companies should not boycott exports from the country.
C. domestic companies should not comply with boycott regulation imposed by the importing country.
D. trade should be liberal as provided under WTO charter.
ANSWER: C
Question 1: In which of the following modes of entry, does the domestic manufacturer give the right to
use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee
a. Licensing
b. Contract manufacturing
c. Joint venture
d. None of these
Answer: (a) Licensing
Question 2: Outsourcing a part of or entire production and concentrating on marketing operations in

international business is known as
a. Licensing
b. Franchising
c. Contract manufacturing
d. Joint venture
Answer: (c) Contract manufacturing
Question 3: When two or more firms come together to create a new business entity that is legally
separate and distinct from its parents it is known as
a. Contract manufacturing
b. Franchising
c. Joint ventures
d. Licensing
Answer: (c) Joint ventures
Question 4: Which of the following is not an advantage of exporting?
a. Easier way to enter into international markets

b. Comparatively lower risks
c. Limited presence in foreign markets
d. Less investment requirements
Answer:(c) Limited presence in foreign markets
Question 5: Which one of the following modes of entry requires higher level of risks?
a. Licensing
b. Franchising
d. Joint venture
Answer: (d) Joint venture
Question 6: Which one of the following modes of entry permits greatest degree of control over
overseas operations?
a. Licensing/franchising
b. Wholly owned subsidiary
d. Joint venture
Answer: (b) Wholly owned subsidiary
Question 7: Which one of the following modes of entry brings the firm closer to international markets?
a. Licensing
b. Franchising
d. Joint venture
Answer: (d) Joint venture
Question 8: Which one of the following is not amongst India’s major export items?
a. Textiles and garments

b. Gems and jewellery
c. Oil and petroleum products
d. Basmati rice
Answer: (c) Oil and petroleum products
Question 9: Which one of the following is not amongst India’s major import items?
a. Ayurvedic medicines
b. Oil and petroleum products
c. Pearls and precious stones
d. Machinery
Answer: (b) Oil and petroleum products
Question 10: Which one of the following is not amongst India’s major trading partners?
a. USA
b. UK
c. Germany
d. New Zealand
Answer: (d) New Zealand
1. A stable, honest and efficient political system is a primary factor for the growth of
a) Business
b) General environment
c) Economic conditions
d) Natural environment
2. When the rate of change in is insignificant, it is termed as
environment
a) General or specific
b) Stable or static
c) Dynamic or certain
d) Simple of complex
3. is an open form of government.
a) Parliamentary System
b) Government environment
c) Legal environment
d) Political environment
4. China is the biggest example
a) Capitalism
b) Mixed economy
c) Laissez Faire
d) Socialism
5. The term relates to patent, trademarks, copyrights and trade secrets.
a) Priority right
b) Intellectual property right
c) Tariff & Trade Act
d) Madrid agreement
6. is also called the International convention for the protection of industrial property.
a) Paris Union
b) National Treatment
c) Industrial Policy Act

d) Intellectual property Right
7. means that if an investor registers a patent in one member country, he can file an application for
registration in other member countries within one year from the date of filing return,
a) Patent cooperation Treaty
b) Paris Union
c) Priority Right
d) National Treatment
8. The international registration of Trade Marks aims at the international registration is
a) Trade Mark Registration Treat
b) Independent of patents
c) Patent Cooperation Treaty
d) The Madrid Agreement
9. International Bureau of World Intellectual Property Organization is
a) U.S.A.
b) Geneva
c) Switzerland
d) Canada
10. Involves infringement of a patent or trade mark.
a) Counter feiting
b) Unauthorised product
c) Illegal goods
d) Low quality products
11. E.E.C stands for
a) European Economics Control
b) European Economic Community
c) European Economic centre
d) European Economic Committee
12. E.E.C. is also known as
a) Economic Common Market
b) NFTA
c) IPA
d) European Common Market
13. ECM was brought into being
a) 31 Dec. 1957
b) 15 Jan, 1958
c) 1 Jan, 1958
d) 24 March 1957
14. World's largest trading Block is
a) NAFTA
b) SAARC
c) CEC
d) ECM
15. NAFTA mean
a) North American Free Trade Agreement
b) North American Foreign Trade Agreement
c) North Asian Free Trade Agreement
d) North Asian Foreign Trade Agreement.

16. NAFTA is a series of bilateral agreement between America, Canada and
a) Geneva
b) Mexico
c) UK
d) Ireland
17. SAARC association brings together countries of South Asia for regional co-operation.
a) 9
b) 8
c) 7
d) 14
18. The head quarters of SAARC in
a) Bangladesh
b) Maldives
c) Sri Lanka
d) Kathmandu
19. was commenced on January 1, 1994
a) NAFTA
b) ECM
c) SAARC
d) CEC
20. is a bilateral trade agreement between two countries.
a) Tie in Agreement
b) Counter trade
c) MNC
d) Gray Market
21. is the process of convincing the various powerful elements of the environment to act in
the favour of the organisations.
a) Coalescing
b) Cooptation
c) Lobbying
d) Procurement
22. Two or more organisations may merger their organisations to have better control over the
environment as various resources are pooled together is
a) Cooptation
b) Lobbying
c)Agreement
d) Coalescing
23. was a Multilateral treaty encompassing rules and disciples for an orderly world trading
system?
a) GATT
b) ITO
c) ECM
d) SAARC
24. means each nation shall be treated as well, as the most favoured nation.
a) GATT
b) MFN
c) FTZ
d) TRRM
25. Trade in Textile was restricted by
a) MFN
b) GATT
c) MFA
d) ITO
26. is known a neo-liberalism
a) Globalization
b) Liberalisation
c) Privatization
d) None of the above
27. refers to a process of increasing economic integration and growing economic

interdependence between countries in the world economy.
a) MNC
b) TNC
c) Globalisation
d) WTO
28. means acceptance of an outward looking policy of economic development in place of an

inward – looking one.
a) Liberalization
b) Privatisation
c) Globalization
d) All of the above
29. ESCAP stands for
a) Economic and Social Commission for Asia and the Pacific
b) Economic and Social Centre for Asia and the Pacific
c) Economic and Social Commission for the Asia and Privatisation

d) Economic and Social Culture for Asia and Public
30. is a method of doing business by which a franchisee is granted the right to offer, sell or
distribute goods or service under a system created by the Franchisee?
a) Agreement
b) Dealership
c) Patent
d) Franchising
31. means setting a products a company to its affiliated company in host country.
a) Direct exporting
b) Intra corporate transfer
c) indirect exporting
d) Exporting
32. BOT means
a) Business Outsourcing Trade
b) Balance on Trade
c) Build, operation and Transfer
d) Business Outsourcing Transaction
33. FERA was replaced by
a) FEMA
b) GATT
c) WTO
d) ITO
34. WTO was setup in
a) 1995
b) 1992
c) 1996
d) 1994
35. is the process of contracting with foreign firms granting them

proprietary right to use technology, copyrights, trade marks, brand names etc.
a) Franchising
b) Licensing
c) Contract
36. arrangement is also known as cross licensing
a) Licensing
b) Franchising
c) Intra corporate transfers
d) Contracts
37. A company doing international marketing contracts with a foreign producer to manufacture or
assemble the products for a sale in the foreign market is
a) Management contract
b) Contract Manufacturing
c) Turnkey Contract
d) Licensing
38. are therefore arrangement where by for a fee, one company provides personnel to perform
general specialized management functions for another company.
a) Licensing
b) Franchising
c) Contract Manufacturing
d) Management contract
38. is a contract under which a firm agrees to fully design, construct and equip a
manufacturing or business or service facility and turn the project to the purchaser ready for
operation for a remuneration.
a) Manufacturing contract
b) Management contract
c)Turnkey contracts
d) Joint venture
39. is part of the parent corporation and simply an extension of domestic operation.
a) Foreign Subsidiary
b) Overseas branch
c) Third country location
d) Assembly operation
40. is a separate company organised under a foreign nations legal code with accountability
distinct from the parent company.
a) Foreign subsidiary
b) Oversees branch
c) Assembly operation
d) Fully owned manufacturing
41. is a peculiar form of international trade that encompasses more than an exchange of
goods services or idea for money.
a) Turnkey contract
b) Licensing
c) Counter Trade
d) Buy back
42. of economic policy is intended to promote the integration of Indian economy with the
global economy.
a) Globalisatioin
b) Liberalisation
c) Privatisation
d) None of the above Ans. B
43. is an enterprise which allocates company resources without regards to

national frontiers, but is nationally based in terms of ownership and top management.
a) MNC
b) Globalisation
c) Liberalisation
d) TNC
44. conference of 1944 suggested institutional arrangements to undertake post wear

reconstruction of global economy.
a) Urugay Round Agreement
b) Narasimham Committee
c) Brotton woods
d) Hilton Young Commission
45. The GATT agreement had been signed by governments known as
a) Member countries
b) Trade members
c) MFN
d) Contracting Parties
46. Article XIX of the GATT provided
a) General prohibition of QRs
b) Emergency safeguard code
c) Schedule of Tariff Concessions

d) MFN Clause
47. GATT agreements as modified by the agreement
a) WTO
b) ITO
c) Uruguay Round
d) Bretton wood
48. is in fact, policeman of global trade.
a) GATT
b) ITO
c) TRIMS
d) WTO
49. is the Supreme Authority of the WTO
a) General Council
b) Ministerial conference
c) Council for Trade in Goods
d) Council for TRIPS
49. Council for Trade in Goods, Services and Intellectual property Rights, Council for Trade Related
intellectual property Rights are the three council in General council
of
a) WTO
b) GATT
c) TRIMS
d) GATS
50. The Secretariat of the WTO is headed by the
a) General Council
b) Ministerial conference
c) Director General
d) Council for TRIPS
51. is a permanent institution with its own Secretariat.
a) WTO
b) GATT
c) GAT
d) ITO
52. GATT was applied on a
a) Permanent basis
b) Provisional basis
c) Both a and b
53. Initial registration and each renewal of registration, of a trade mark is for a term of not less than
a) 5 years
b) 4 years
c) 6 years
d) 7 years
54. The agreement of patent protection for
a) 20 years
b) 15 years
c) 10 years
d) 7 years
55. Plurilateral Trade Agreement was done at Ganeva in
a) March 1979
b) April 1979
c) January 1994
d) August 1984
55. NIEO means
a) New International Economic Order
b) New Industrial Economic Order
c) New Industrial Economic Organisation
d) New International Economic Organisation
56. is the effect International Trade has a detrimental effect on under developed countries
a) Lop - sided development
b) Deterioration
c) Demonstration effect
57. The manor attributes of international financial system are knowledge, certainty and
a) Flexibility
b) Predictability
c) Continuity
d) Structural
58. established a mechanism where by their local currencies are kept equal in value to gold
and to each other.
a) International money
b) Floating exchange rate
c) Bretton wwod system

d) International Gold standard
59. IMF was organised in
a) 1948
b) `1946
c) 1956
d) 1958
60. was introduced in 1969
a) Oil Facility
b) Extended facility
c) Buffer stock facility
d) Trust Fund facility
61. In the form of pound sterling and U.S. dollars, these two currencies were known as
a) Reserve currencies
b) Foreign exchange
c) Floating Exchange rate
d) Exchange transaction
62. SDR was approved in
a) 1969
b) 1965
c) 1967
d) 1972
63. will include interest and amortization payment, put a strain on future balance of payments
a) Credit Servicing charges
b) Debit servicing charges

c) Both a and b
64. India is place in IMF General Quota
a) 12th
b) 11th
c) 9th
d) 13th
65. are also known as International Bank for Reconstruction and Development.
a) IMF
b) ADB
c) World Bank
d) ECM
66. is the Supreme governing authority of World Bank.
a) The president
b) The Executive Directors
c) The Board of Governors
d) Members of the Board
67. becomes the Ex-officio Chairman of World Bank.
a) The Board of Governors
b) The Executive Directors

c) Other members
d) The President
68. is responsible for the conduct of the ordinary business of the bank and its organisation
a) The Governor
b) The President
c) The Executive Directors
d) Other members
69. In the day to day administration the Board delegates its power to
a) Other members
b) The Board of Governors
c) The President
d) The Executive Directors
70. ADB was setup in
a) 1969
b) 1967
c) 1966
d) 1968
71. The headquarters of ADB is
a) Geneva
b) Manila
c) U.S.A
d) Italy
72. The highest policy making body of the ADB is
a) Board of Governors
b) Board of Directors
c) President
d) Other members
73. To take decisions of loan application in ADB by
a) Board of Governors
b) Board of Directors
c) The President
d) Other members
74. The President elected for a term in ADB
a) 3 Years
b) 4 Years
c) 5 Years
d) 6 Years
75. is also known as the European Common Market.
a) EEC
b) CEC
c) SADF
d) NAFTA
76. is the most successful of the integration schemes.
a) ECM
b) SAARC
c) NAFTA
d) CEC
77. is the World's largest trading block
a) NAFTA
b) EEC
c) SAARC
d) GATT
78. GATT was replaced by the WTO on
a) 1 Jan. 2004
b) 1 Jan 1996
c) 1 Jan. 1992
d) 1 Jan. 1995
79. Under approach companies view the entire world as a single country.
a) Geocentric
b) Regio centric
c) Poly centric
d) Ethno centric
80. Companies establish foreign subsidiary and empowers its executives is
a) Regio centric
b) Geocentric
c) Poly centric
d) Ethno centric
81. theory suggests for maintaining favourable balance of trade in the form of import of gold
for export of goods and services.
a) Gold standard
b) Mercantilism
c) Non merchantilism
d) Breton wood system Ans. b
82. is the application of knowledge which redefine the boundaries of global business.
a) Cultural factors
b) Political factors
c) Social factors
d) Technology
83. is a form of licensing
a) Franchising
b) Patent
c) Brand
84. is the long term contracting out of non-core business processes to an outside to help
achieve increased share holder value
a) Contract manufacturing
b) BPO
c) Management contract
d) Turnkey contract
85. A is a contract under which a firm agrees to fully design, construct and equip a
manufacturing/business service facility and turn the project over to the purchaser when it is ready
for operation for a remuneration.
a) BPO
b) Contract Manufacturing
c) Turnkey project
d) Management contract
86. First WTO Ministerial conference held in
a) Geneva
b) Singapore
c) Manila
d) Dona
87. In WTO is the highest hierarchical level in the organizational structure.
a) General council
b) Committee and Management Bodies
c) Management Bodies
d) Ministerial conference
88. is the sale of goods abroad at a price which is lower than the selling price of the same
goods at the same time in the same circumstances at home, taking account of difference in
transport costs.
a) Dumping
b) Tariff
c) Anti dumping
89. When the production of a product is more than the demand in the home country, the stocks piled
up even after sales is
a) Persistent Dumping
b) Predatory dumping
c) Intermittent Dumping
d) Anti Dumping
90. The monopolist sells the remaining production in foreign countries at a low price continuously in
a) Intermittent Dumping
b) Persistent Dumping
c) Predatory Dumping
d) Anti dumping
90. The monopolist sells the product in a foreign market at a low price initially with a view to drive
away the competitors and increase the price after the competitors leave the market in
a) Predatory dumping
b) Intermittent dumping
c) Persistent dumping
d) Anti duping
91. India was one of the Governments that become members of the WTO on the first day of
the formation of the WTO
a) 56
b) 96
c) 76
d) 103
92. EU Council Committee is also called
a) Corper
b) Executive body
c) Advisory committee
d) Commissioners
93. The Corper is the link between the EU and
a) Commissioners
b) Council
c) Executive body
d) Member Governments
The North American Free Trade Agreement (NAFTA) came into being on
a) 1 Jan. 1992
b) 1 March 1996
c) 1 Jan. 1994
d) 1 March 1994
94. In the year 1989 was established
a) NAFTA
b) APEC
c) ESCAP
d) SAARC
95. is expected to eliminate all tariffs and trade barriers among the USA, Canada and Mexico.
a) SAARC
b) ASEAN
c) NAFTA
d) EEC
96. OPEC means
a) Organisation of Petroleum Exporting Countries
b) Organisation of Pacific Economic Co-operation
c) Organisation of Pacific European Co-operation

d) Organisation of Pacific Exporting Commission Ans. a
97. The remaining balance of quota, after drawing 25% of reserve trench is called
a) God Trench
b) Credit trench
c) Quotas
d) Fund lending
98. The short fall of the member's currency with fund over its quota is called
a) Gold trench
b) Credit trench
c) Reserve trench
d) Quotas
99. are popularly known as "Paper Gold".
a) Gold trench
b) Gold standard
c) Gold Exchange Standard
d) Special Drawing Rights
100. is popularly known as World Bank
a) IBRD
b) IDA
c) ADB
d) IMF
101. IDA was established primarily to provide finance to less developed

member countries on a basis.
a) Credit
b) Soft loan
c) Debit
d) Hard loan
102. IDA loans are known as
a) IDA credit
b) IDA debit
c) Soft loan
d) Both a and b
103. The first conference of the UNCTAD was held in
a) USA
b) Seattle
c) Geneva
d) Mexica
104. The product is sold at a high price in international markets and at a low price in the domestic
market is called
a) Reverse dumping
b) Persistent dumping
c) Predatory dumping
d) Sporadic dumping Ans. a
105. is an arrangement to pay for import of goods and services with something other than
cash.
a) Turkey contract
b) Counter Trade
c) Dumping
d) None of the above Ans. b
106. is goods - for - goods deal
a) Contract
b) Trade
c) Counter Trade
d) Purchase
107. Privatisation may be effected in the form of
a) Liberalisation
b) Globalisation
c) Dis-investment
108. The industrial policy of the Government of India was declared by

a) Indira Gandhi
b) Rajeev Gandhi
c) Narasimha Rao
d) Jawaharlal Nehru
109. The Industrial Policy Resolution 1956 was known as
a) New Industrial Policy
b) Economic Policy
c) Economic Constitution of India
d) Industrial reforms
110. consisted of 17 industries and future development of the industry, it is to be excluded

responsibility of the state
a) Schedule B
b) Schedule A
c) Schedule D
d) Schedule C
111. The organization is said to be when some sudden and unpredictable changes take place is
called
a) Changing environment
b) Stable environment
c) Natural environment
d) Turbulent environment
112. In an organisation, changes occur slowly but threat occurs in cluster is called
a) Placid - clustered environment
b) Placid - rando-mixed environment
c) Disturbed - reactive environment
d) Turbulent field environment

113. is a device used to establish a set of priorities for using the organization’s scarce
resources
a) Buffering b) Rationing
c) Smoothing d) Coalescing
114. is the process of convincing the various powerful elements of the environment to act in
the favour of the organisations.
a) Coalescing b) Co-optation
c) Lobbying d) None of the above
115. is an unintended channel of distribution that runs parallel to the planned channel.
a) Gray market b) Black market
c) Bribery d) Counterfeiting
116. Culture is
a) Subjective b) Prescriptive
c) Cumulative d) All of the above
117. is a series of bilateral agreement between America, Canada and Mexico
a) SAARC
b) APEC
c) NAFTA
d) ASEAN
118. agreement as modified by the Bretton wood agreement.
a) WTO
b) ITO
c) GAAT
d) TRIMS
119. means replacement of existing non-tariff restriction on trade such as import quotas.
a) Tariffication
b) Tariff binding
c) Tariff cuts
d) Reduction in subsidies
120. The import aspects of the UR agreement on agriculture include Tariffication, Tariff binding, Tariff
cuts and
a) Tariff
b) Tariff rates
c) Reduction in subsidies and domestic support
121The combined package of trade rules and Tariff concessions became known as the
a) WTO
b) GATT
c) NAFTA
d) SAARC
121. may be defined as "information with a commercial value".

a) GATT
b) TRIPS
c) WTO
d) IPRS
122. Creators can be given the right to prevent others from using their inventions, designs or other
creations is known as
a) TRIMS
b) TRIPS
c) IPRS
d) GAAT
123. was a set of rules and multilateral agreement

a) TRIPS
b) TRIMS
c) GATT
d) WTO
124. In TRIPS, a patent would be applicable for
a) 10 Years
b) 20 years
c) 25 years
d) 30 years Ans. b
125. GATT covers which of the following?
a) Cross-border equity
b) Consumption abroad
c) Commercial presence
d) All the above
126. WTO Anti-dumping agreement doesn't have
a) rules for calculating the amount of dumping
b) procedures for conducting anti-dumping investigations
c) rules for setting disputes related to restrictive quota practices
d) standards for dispute settlement panels to apply in anti-dumping disputes

127. The time limit specified by the Agreement on import licensing for the agencies to deal with the
procedure.
a) 15 days
b) 30 days
c) 60 days
d) 90 days
128. The rules and commitment of Agreement on Agriculture apply to
a) Market access
b) Domestic support
c) Export subsidies and other programs
d) All the above
129. duties can be imposed of a product is dumped in the importing country at less than its
normal value provided it causes material injury to the domestic industry.
a) Tariff
b) Anti-dumping
c) Countervailing
d) Reduction in subsidies Ans. b
130. are maximum tariffs imposed by the member countries of WTO.
a) Rates
b) Subsidies
c) Quotas
d) Bound rates
131. The fundamental principles of GATT was
a) Most Favoured Nation
b) National Treatment
c) Both a and b
132. Anti-dumping and countervailing duties are imposed under
a) Customs Tariff Act 1975
b) TRIMS
c) TRIPS
d) Regional Trade Agreement
133. Bhutan has Bilateral Trade Agreement with
a) Sri Lanka
b) Pakistan
c) Russia
d) India
134. FMCG means
a) Fast Moving Consumer Goods

b) Foreign Measures on Consumer Goods
c) Freely Moving Consumer Goods
d) Free Measures on Consumer Goods
135. Copyright means the exclusive right to do or authorize others to do certain acts in relation to
a) Literary, dramatic, musical or artistic work
b) Cinematography
c) Sound recordings
d) All the above
136. Which one of the following is the function of trade mark
a) Identifies the product and its origin
b) Guaranteed its unchanged quality
c) Advertises the product
d) All the above
137. is the art and other manifestations of human customs, civilization and the way of life a
particular society or group.
a) Culture
b) Trends
c) Business
d) Marketing
138. The cultural habit of firm hand-shake is associated with the culture of
a) US
b) Middle East
c) Arab countries
d) Japan
139. The Highest Hofstadter Dimension for a culture is
a) LTO
b) PDI
c) UAI
d) IDV
140. A separate Bilateral NAFTA on market access for agricultural products with Canada and
a) America
b) Britain
c) Mexico
d) Japan
141. The SAARC countries comprise
a) Indonesia, Malaysia, Philippines, Singapore, Thailand, Bhutan,
Nepal
b) Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka
c) Sri Lanka, Bhutan, Nepal, China, India, Bangladesh, Indonesia

d) Bangladesh, Bhutan, China, Nepal, Pakistan, India, Sri Lanka
142. provides a platform for the peoples of South Asia to work together in a spirit of friendship
trust and undertaking.
a) OECS
b) ASEAN
c) SAARC
d) NAFTA
143. ASEAN established on 8 August 1967 in
a) Katmandu
b) Singapore
c) Bangkok
d) Nepal
144. ASEAN was established by the five original member countries are
a) Indonesia, Malaysia, Philippines, Singapore and Thailand
b) India, Malaysia, Bhutan, Singapore, Thailand

c) India, Sri Lanka, Malaysia, Philippines, Thailand
d) India, Sri Lanka, Singapore, Thailand, Malaysia
145. The exchange rate system under the IMF came to be known as
a) Gold standard
b) Floating rate
c) SDRS
d) Breton Wood System
146. were created as a reserve asset by the IMF
a) Floating rate
b) SDR
c) Credit trench
d) God standard
147. The of a country refers to the systematic record of all receipts and payments between
residents of the country and nonresidents over a period of time.
a) Pegging
b) Extended Fund Facility
c) BOP
d) Structural Adjustment Facility

148. Holding gives the bearer the option to acquire foreign exchange from the monetary
authorities of another member of the IMF
a) SDR
b) Gold standard
c) Credit trench
d) All of the above
149. Which of the following is a form of contractual agreement
a) Franchising
b) Licensing
c) Joint venture
d) Both a and b
150. Build, operate and transfer is the basic principle of
a) Strategic alliance
b) Turnkey projects
d) Management Contract
151. Which of the following is not a joint venture?
a) Licensing
b) Franchising
c) Strategic alliance
d) Contract Manufacturing
152. allows a company to conduct business in another country whose laws discourage foreign
ownership
a) Contract Manufacturing
b) Licensing
c) Franchising
d) Joint venture
153. Which country is known for group harmony and collectivism?
a) USA
b) France
c) Germany
d) Japan
154. Globalization is based on the theory of
a) Mixed economy
b) Capitalism
c) Free trade and comparative advantage
d) Import Substitution
155. The process of globalization of the economy refers to
a) Removal of restrictions on foreign trade and foreign investment
b) Economic growth
c) Foreign investment in flow
d) Employment generation Ans. a

156. The member countries of WTO have moved to "Product Patent Regime" under
a) TRIMS
b) TRIPS
c) GATTS
d) SAPTA
157. Contract Manufacturing is a form of
a) Acquisition
b) Franchising
c) Licensing
d) Joint venture
158. GATS operates on levels
a) 2
b) 6
c) 7
d) 3
159. is the first ever set of multilateral, legally enforceable rules covering international trade in
services.
a) GATS
b) TRIPS
c) TRIMS
d) WTO
160. means treating one's trading equally
a) GATS
b) WTO
c) MFN
d) TRIPS
161. MFA was replaced on 1 Jan. 1995 by
a) AOA
b) ATC
c) GATS
d) TRIMS
162. Removal of QRS means
a) Duty free imports
b) An item can be imported without import license or
quotas
c) All imports are free of tariffs
163. India has Bilateral Trade Agreement with
a) Sri Lanka
b) Pakistan
c) Nepal
d) Bhutan
164. transfers are selling of products by a company to its affiliated company in host country.
a) Indirect export
b) Direct exporting
c) Intra-corporate
d) All the above
165. is the long term contracting out of non-core business processes to an outside provider to
help achieve increased shareholder value.
a) BPO
b) Turnkey project
d) Management Contract
166. WTO members abolished quotas on trade in
a) Agriculture
b) Textiles and clothing
c) Tropical products
d) Natural Resources based products
167. operates as a co-operative, multi-lateral, economic and trade forum.
a) ASEAN
b) APEC
c) SAARC
c) ESCAP
168. is the fastest growing trading bloc in the world.
a) MERCOSUR
b) NAFTA
c) EEC
d) ESCAP
169. Marketing forces to determine the exchange rate of currencies under
a) Gold Standard
b) Bretton wood system
c) Floating rate system
d) Credit Tranche Ans:c
170. is called the soft loan window of the IBRD.
a) IFC
b) IDA
c) UNCTAD
d) IMF
171. is a joint venture of IBRD and IFC.
a) UNCTAD
b) IDA
c) IMF
d) MIGA
172. promotes the development friendly integration of developing countries

into the world economy.
a) UNCTAD
b) IBRD
c) IMF
d) IDA
173. provides long term loans at a very low rate of interest to the less
developed countries.
a) IFC
b) IDA
c) IBRD
d) MIGA
MCQ Questions of International Business Environment (307)
Unit I
Q.1 Nations conduct international trade because:
a) Some nations prefer to produce one thing while others produce other things.
b) Resources are not equally distributed among all trading nations.
c) Trade enhances opportunities to accumulate profits.
d) Interest rates are not identical in all trading nations
Ans - b
Q.2 International Trade is most likely to generate short-term unemployment in:
a) Industries in which there are neither imports nor exports
b) Import-competing industries
c) Industries that sell to domestic and foreign buyers.
d) Industries that sell to only foreign buyers
Ans- b
Q.3 Globalization refers to:
Ans –d
Q.4 Increased foreign competition tend to
a) Intensify inflationary pressure at home
b) Induce falling output per worker-hour for domestic workers
c) Place constraints on the wages of domestic workers
d) Increase profits of domestic import-competing industries
Ans- c
Q.5 The movement to free international trade is most likely to generate short-term
unemployment in which industries

a) Industries in which there are neither imports nor exports
b) Import-competing industries.
c) Industries that sell to domestic and foreign buyers
d) Industries that sell to only foreign buyers
Ans- b
Q.6 International trade forces domestic firms to become more competitive in terms
of
a) The introduction of new products
b) Product design and quality
c) Product price
d) All of the above
Ans –d
Q.7 If a nation has an open economy it means that the nation:
a) Allows private ownership of capital.
b) Has flexible exchange rates
c) Has fixed exchange rates
d) Conducts trade with other countries
Ans- d
Q.8 According to Adam Smith, the trade between countries should happen _____.
a) Naturally according to the market forces

b) Under government regulation
c) Using factors that are available
d) Only when a country has an absolute advantage
ans-d
Q.9 Mercantilists believed that a country could increase the amount of wealth it had
by _____.
a) Promoting exports and discouraging imports
b) Discouraging exports and promoting imports
c) Controlling imports and exports
d) Increasing both imports and exports
ans- a
Q.10 Investment in Plant & machinery is termed asa) FDI
b) FII
c) Portfolio Investment
d) Capital Investment
Ans- D
Q.11 The traditional mode of entering into international business is
a) Licensing
b) Exporting
c) Joint venture
d) Subsidiary
Ans- b
Q.12 Which type of following stage of internationalization has Decentralized decision
making?
a) Subsidiary
b) Multinational Corporation
c) Transnational corporation
d) Domestic Company
Ans – c
Q.13 Agreement between two parties where in one gives rights to use their intangible
property to another entity is called asa) Direct Exporting
b) Turnkey project
c) Strategic alliance
d) Licensing
Ans- d
Q. 14 Domestic company is___ stage of internationalization process.
3rd
2nd
1st
None
Ans- c
Q.15 Only manufacturing and exporting as per the requirement of importer is called
a) Direct Export
b) Sales
c) Import
d) Indirect Export
Ans- d
Q.16 Complex projects involving creation of an asset as per the requirement of the
client is
called _________.
a) Joint venture
b) Strategic alliance
c) Turnkey Project
d) Subsidiary
Ans- c
Q.17 Rapid integration or interconnection between countries is known as:
a) Globalisation
b) Liberalisation
c) Socialisation
d) Privatisation
Ans- a
Q.18 Globalisation has improved in the living structure of
a) All the people
b) Workers in Developing Countries
c) People in developed Countries
Ans- c
Q.19 The main reason behind MNCs investments area) To benefit foreign countries
b) To provide financial support to the country’s Government
c) For the welfare of underprivileged people
d) To increase assets & earn profits
Ans -d
Q. 20 Which institute supports investments and foreign trade in India?
a) IMF
b) WTO
c) World Bank
d) International labour Organisation ( ILO)
Ans - b
Q.21Which of the following is not a feature of a Multi-National Company?
a) It owns/ control production in more than one nation

b) It set up factories where it is close to the market
c) It organises production in complex ways.
d) It employs labour only from its own country
Ans - d
Q. 22 An MNC is a company that owns or controls production in
a) One country
b) More than one country
c) Only developing countries
d) Only developed countries
Ans - b
Q.23 Which is the right sequence of stages of Internationalization
Answer: b
Unit II
Q.24 Which of the following business environment are known and controllable?
a) Domestic business Environment
b) Foreign business Environment

c) International business Environment
d) None
Ans – a
Q.25 Forces that impacts business environment due to change in government is type
of
a) Legal
b) Cultural
c) Social
d) Political
Ans- d
Q. 26 Which of the following is not cultural factor?
a) Language
b) Income
c) Beliefs
d) Customs
Ans- b
Q. 27 Rise in prices due imbalance between demand and supply is called asa) GDP
b) Inflation
c) Deflation

Ans-b
Q.28 Culture spreads from one place to another and such transmission is called as
________.
a) difference.
b) reputation.
c) adoption.
d) heritage.
ANSWER: A
Q 29. What are the elements of business ethics?
a) Values rights and duties.
b) attitudes pressure and environment.
c) value environment and attitude.
d) Responsibilities.
ANSWER: A
Q.30 India follows the ________political system
a) Authoritarian
b) Parliamentary
c) Absolutist system
d) Military dictatorship
Ans – b
Q.31 The _______ is being driven by the demand and supply of products and services.
a) Market economy
b) Capitalist economy
c) Both a & B
d) Socialist Economy
Ans -c
Q.32 India is the best example ofa) Market Economy
b) Capitalist economy
c) Mixed Economy
d) Socialist Economy
Ans- c
Q. 33Which of the following is not only a part of ethics but statutory compliance?
a) Preserving Natural resources
b) Development of Roads
c) Fair Product & Prices
d) Disclosure of Financial Statement
Ans –d
Q.34 Which of the following attitude is result of religion?
a) Attitude towards work
b) Purchasing Behaviour
c) None of the both
d) Both A & B
Ans- D
Q. 35 Commitment, competence and consistency are three distinct characteristics

that result in ______________
a. Culture building
b. Values
c. Organizational socialization
d. Attitudes
Ans- a
Q.36 The practices of a company for which it is accountable in relation to other

parties is
called ____________
a. Social responsibility
b. Code of Ethics
c. Values
d. Culture
Ans: (a)
Q. 37 National culture is based on ______________
a. Language
b. The territory of the state

c. The sense of belonging of a people
d. The nation-state.
Ans: (c)
Q. 38 Corporate governance is a form of
a. External regulation
b. Self-regulation
c. Government control
d. Charitable action
Ans: (b)
Q. 39 CSR & corporate governance represent a -------- between business and society.
a. Social climateb. Special contract
c. Special climate
d. Social contract
Ans: (d)
Q.40 Corporate governance is concerned with the formation of …………… term

objective
a. Very short
b. Short
c. Medium
d. Long
Ans: (d)
Unit III
Q .41 The Current System of International Finance is aa) gold standard
b) Fixed Exchange rate system
c) Floating exchange rate system
d) Managed Float Exchange rate system
Ans- d
Q. 42 More expansion of foreign direct investment can boost __________ .
A) Money circulation
B) Demand
C) Employment
D) Unemployment
Answer: C
Q43. More expansion of foreign direct investment can boosta) Money Circulation
b) Demand
c) Employment
d) Unemployment
Ans – c
Q,44 The union government adopted new definition of FDI and FPI in 2014. Which of
the given below is incorrect in this regard
a) The new definition considers 5% investment in capital of an unlisted company as
FPI.
b) The new definition considers 5% investment in capital of an unlisted company as

FDI.
c) The new definition considers 5% investment in capital of an listed company as

FPI.
Ans- a
Q.45 Government has raised FDI level in Brownfield pharma to what percent under
the automatic route to attract capital and technologies in the pharmaceutical sector?
a) 74
b) 49
c) 50
d) 56
Ans- 74
Q. 46 OLI Theory is also known asa) The transaction cost approach
b) The Eclectic Paradigm
c) The strategic linkage theory
d) Perfect market hypothesis
Ans- b
Q.47 Which country leads the inflow of FDI in India?
a) Mauritius
b) France
c) USA
d) UK
Ans-a
Q 48 In which of the following sectors does the Government of India allow more than
50% FDI?
a) Insurance
b) Print media
c) Telecommunications
d) Infrastructure
e) Both A & C
Ans- e
Q.49 In which of the following sectors does the Government of India allow more than
50% FDI?
a) Joint venture
b) Strategic alliance
c) Acquisition
d) Merger
Ans- b
Q. 50 Which of the following theories explains the behaviour of late entrants to catch
up with the competition?
a) OLI theory
b) Transition Cost approach
c) The Leapfrogging theory
d) The perfect market Hypothesis
Ans- c
Q. 51 Which of the following types of FDI includes creation of new assets and
production
facilities in the host country?
a) Brownfield investment
b) Mergers & Acquisition
c) Strategic Alliance
d) Greenfield investment
Ans- d
Q. 52 Both foreign direct investment (FDI) and foreign institutional investment (FII)
are
related to investment in a country. Which of the following is incorrect regarding FDI

and FII?
a) Both FII and FDI bring capital into the economy.
b) FII invests in technology-oriented enterprises, whereas FDI invests in traditional

business set ups.
c) The restrictions on the entry of FDI are lower than that on FII.
d) FDI is considered to be more stable thna FII. FII can be withdrawn even at a short
notice.
Answer : b
Q. 53 : Which of the following statements is/are correct regarding FDI under

automatic
route?
1. FDI in India under the automatic route does not require prior approval either by the
Government of India or the Reserve Bank of India.
2. Investors are only required to notify the concerned regional office of the RBI
before
receipt of inward remittances and file required documents with that office before the
issue of shares to foreign investors.
Select the correct answer using the codes given below.
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Ans : c
Q 54: Which of the following are the components of foreign capital?
1. Grants and loans
2. External commercial borrowings
3. Foreign direct investment
4. Deposits from non-residents

Select the correct answer using the codes given below.
a) 1, 2, 3, and 4
b)1, 2, and 4 only
c) 1 and 2 only
d) 3 and 4 only
Ans : a
Unit IV & V
Q. 55 The value of Special Drawing Right (SDR) is determined by the basket of
......currencies.
(a) 4
(b) 5
(c) 6
(d) 7
Ans. B
Q. 56 Which of the following is not the objective of the IMF?
(a) To promote international monetary cooperation(b) To ensure balanced

international trade
(c) To ensure exchange rate stability
(d) To provide loan to private sectors
Ans. D
Q. 57 If the Balance of Payment of a country is adverse, then which institution will
help
that country?
(a) World Bank
(b) World Trade Organization
(c) International Monetary Fund
(d) Asian Development Bank
Ans- c
Q. 58 Which of the following is known as the Paper Gold?
(a) US Dollar
(b) Pound
(c) Demand draft
(d) Special Drawing Right
Ans. D
Q. 59 Why the World Bank was established?
(a) To promote the International Trade
(b) To reconstruct the economies damaged during the Second World War
(c) To improve the adverse Balance of Payment situation of the nonmember

countries
(d) None of the above
Ans. B
Q. 60 Which of the following statement is correct?
(a) Every member country of the IMF automatically becomes the member of the
World Bank
(b) The World Bank has 45 founder members
(c) India is not the founding member of the World Bank(d) IMF is the part of World
Bank group
Ans. a
Q. 61 Which of the following is not the function of the World Bank?
(a) To provide long term loan to the member countries
(b) To provide loan to private investors belonging to member countries on its own
guarantee
(c) To ensure exchange rate stability
(d) To provides loan mainly for productive activities
Ans. C
Q. 61 Which of the following institutions is not part of the World Bank community?
(a) IBRD
(b) WTO
(c) IDA
(d) IFC
Answer b
Q. 62 The main focus of IBRD and IDA is on ___________:

a) Developed Countries
b) Developing Countries
c) Both of The Above
d) None of The Above
Ans- B
Q. 63 The president is selected by the board of executive directors for a ____year,
renewable term:
a) 5 Year
b) 3 Year
c) 4 Year
d) None of The Above
Ans- aQ 64 . Which of the following does not form part of current account under
balance of
payments?
Export and import of goods
b) Export and import of services
c) Income receipts and payments
d) Capital receipts and payments
Answer : d
Q. 65 Which of the following pairs is not correctly matched with regard to balance of
payment accounts?
a) Import of goods and services – Debit in the current account
b) Receipts of transfer payments – Credit in the current account
c) Direct investment receipt – Credit in the capital account
d) Portfolio investment payments – Debit in the current account
Answer : d
Q. 66 A country is said to be in debt trap if
a) It has to abide by the conditionality imposed by the International Monetary Fund
b) It is required to borrow money to make interest payments on outstanding loans
c) It has been refused loans or aid by creditors
d) The World Bank charges a very high rate of interest on outstanding as well as new
loans
Answer : b
Q. 67 Balance in capital account refer to the
a) Nation’s net exports of goods and services
b) Nation’s net exports of financial claims
c) Nation’s net exports of international official reserve assets
d) Nation’s sum of net exports of goods, services and financial claims
Answer : b
Q. 68 Where is the headquarter of the WTO?(a). New York

(b). Washington DC
(c). Geneva
(d). Austria
Answer: c
Q. 69 Which of the following statement is not true about the WTO?
(a). WTO is a permanent organisation
(b). Uruguay round gave the birth to the WTO
(c).Ministerial Conference is the highest policy making body of the WTO
(d).WTO was officially constituted on 1 January 1991.
Answer: d
Q 70 Which of the following is not the objective of the WTO?
(a). To improve the standard of living of peoples of the member countries
(b). To enlarge production and trade of goods
(c). To protect environment
(d). To improve the Balance of Payment situation of the member countries
Answer: d
Q. 71 Which of the following body is not related to the WTO?
(a). Dispute Settlement Body
(b).Trade Policy Review Body
(c). Council of trade in goods

(d). Exchange Rate Management Body
Answer: d
Q. 72 Which of the followings are called Brettonwoods Twins?
(A) IMF & International Bank for Reconstruction and Development (IBRD)
(B) IMF & World Trade Organisation
(C) IBRD & World Trade Organisation(D) None of the above
Answer A
Q . Which of the following institution is associated with Dunkel Proposals?
(A) World Bank
(B) International Monetary Fund
(C) World Trade Organization
(D) United Nations Organization
Answer C
Q 74. As per Indian GAAP Financial statements are prepared at :
a) Market value
b) Fair value
c) Cost
d) All of the above
Ans- b
Q. 75 total no. Of IFRS is

a) 14
b) 16
c) 17
d) 18
Ans- C
Q. 76 How many Ind As are there in India
a) 21
b) 39
c) 41
d) 32
Ans- C
Q. 77 The accounting standards are mandatory for
a) Sole proprietor
b) Companies
c) Firms
d) societies
Ans- B
Q. 78 what is the Impact of Pandemic COVID-19 on international trade.
a) Long termb) Short term
c) Both a& b
d) Only a
Ans- C
Q 79 Outsourcing has been raising –
a) Nationally
b) Internationally
c) Both a & b
d) Only a
Ans c
Who are the foundation of economies in a digitised worlda) Digital innovations
b) Internet
c) Industry 4..0
d) All of the above
Ans- D
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 firms seek to penetrate new markets over
time?
A.Imperfect Market Theory
B.Product cycle theory
C. Theory of Comparative Advantage
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
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
1. Purchasing goods from a foreign country is called
A. Import
B. Entrepot
C. Export
D. Re-Export
Answer: A
2. Goods imported for the purpose of export is known as
A.Home trade
B. Foreign trade
C. Entrepot
D. Trade
Answer: C
3. Agents are appointed by?
A. Manufacturer
B. Wholesaler
C.Retailer
D.Principal
Answer: D
4. Who among these can check the price fluctuations in the market by holding back the goods
when prices fall and releasing the goods when prices rise
A.Agent
B.Mercantile agent
C.Wholesaler
D. Retailer
Answer: C
5. These are agents whose function is to bring the buyer and the seller into contact.
A.Commission agent
B. Selling agent
C.Broker
D.Stockist
Answer: C
6. Who among the following appoints the agent
A. Principal
B. Retailer
C. Manufacturer
D.Wholesaler
Answer: A
7. Which among the following is not concerned with Chambers of Commerce & Industry
A.CII
B.FICCI
C.ICICI
D.ASSOCHAM
Answer: C
8. Mobile traders who deal in low priced articles with no fixed place of business are called
A. Street stalls
B.Retailers
C. Agents
D.Itinerant traders
9. One example of Small scale Fixed retailers among these is
A. Pedlars
B.General stores
C.Hawkers
D. Cheap Jacks
Answer: B
10. This retail business acts as a universal supplier of a wide variety of products.
A.Multiple shop
B.Mail order Business
C.Tele-shopping
D.Departmental store
Answer: D
Q.1 The foreign direct investment includes _______ .
A) Intellectual properties
B) Human resources
C) Tangible goods
D) Intangible goods
Answer: C
Q.2 The three disputes of FDI are over ______ .
A) Concern
B) Interest
C) Regard
D) Hobby
Answer: B
Q.3 The Treaty of Rome was signed in the year ______ .
A) 1959
B) 1957
C) 1956
D) 1955
Answer: B
Q.4 When did Austria join the European Union?
A) 1997
B) 1993
C) 1995
D) 1999
Answer: C
Q.5 For spreading information, the foreign policy decision-makers rely on _______ .
A) Bureaucrats
B) Politicians
C) Media
D) Public
Answer: C
Q.6 More expansion of foreign direct investment can boost __________ .
A) Money circulation
B) Demand
C) Employment
D) Unemployment
Answer: C
Q.7 How will the offer curve react when customers are heterogeneous?
A) Zero quadrant
B) Negative quadrant
C) Optimum quadrant
D) Positive quadrant
Answer: B
Q.8 Which of the following are improved when capital and labour are moved internationally?
A) Economic growth gains
B) Capital gains
C) Gains from income
D) Gains from trade
Answer: C
Q.9 Which industry will have a free entry?
A) Mineral mining
B) Cable television
C) T-shirt silk screening
D) Satellite radio
Answer: C
Q.10 What is it called when a country is specialised in a particular good and then it trades the
good with other countries?
A) Agreement
B) Interdependence
C) Correlation
D) Dependence
Answer: B
1. Purchasing goods from a foreign country is called
A. Import
B. Entrepot
C. Export
D. Re-Export
Answer: A
2. Goods imported for the purpose of export is known as
A.Home trade
B. Foreign trade
C. Entrepot
D. Trade
Answer: C
3. Agents are appointed by?
A. Manufacturer
B. Wholesaler
C.Retailer
D.Principal
Answer: D
4. Who among these can check the price fluctuations in the market by holding back the goods
when prices fall and releasing the goods when prices rise
A.Agent
B.Mercantile agent
C.Wholesaler
D. Retailer
Answer: C
5. These are agents whose function is to bring the buyer and the seller into contact.
A.Commission agent
B. Selling agent
C.Broker
D.Stockist
Answer: C
6. Who among the following appoints the agent
A. Principal
B. Retailer
C. Manufacturer
D.Wholesaler
Answer: A
7. Which among the following is not concerned with Chambers of Commerce & Industry
A.CII
B.FICCI
C.ICICI
D.ASSOCHAM
Answer: C
8. Mobile traders who deal in low priced articles with no fixed place of business are called
A. Street stalls
B.Retailers
C. Agents
D.Itinerant traders
9. One example of Small scale Fixed retailers among these is
A. Pedlars
B.General stores
C.Hawkers
D. Cheap Jacks
Answer: B
10. This retail business acts as a universal supplier of a wide variety of products.
A.Multiple shop
B.Mail order Business
C.Tele-shopping
D.Departmental store
Answer: D
Question 1 : Ad valorem tax is based on:
a) Income
b) Real value of goods
c) Money value of goods
d) Volume of goods
Answer : c
Question 2 : Consider the following statements:
1. Infant industry argument is advocated in support of protectionism in international
trade.
2. Infant industries require time to undergo the process of learning-by-doing to become
competitive in the long run.
Which of the statements given above is/are correct ?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Answer : c
Question 3 : Which of the following is no an example of sanitary and phyto-sanitary barrier to
trade?
a) Level of pesticide residue in agricultural produce
b) Possibility of imported food causing disease in local population
c) Addictive nature of a beverage
Answer : d
Question 4 : Price discrimination may be possible when
1. The nature of the commodity or service is such that there is no possibility of
transference from one market to other.
2. The markets are separated by large distance or traffic barriers.
3. Several groups of buyers require the same service from clearly differentiated
commodities.
4. Buyers are well informed and rational
Which of the statements given above are correct ?
a) 1 and 2 only
b) 1,3, and 4
c) 2 and 3 only
d) 1, 2, and 3
Answer : d
Question 5 : With reference to import tariffs, consider the following statements:
1. Domestic consumers benefit from the imposition of import tariffs.
2. Imposition of tariffs on imported products increase the level of competition in the
economy.
Which of the statements given above is/are correct ?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Answer : d
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. Conflicts B. Cooperation
C. Hatred D. Both (a) & (b)
Answer B
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 firms 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. 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 efficiency
C. Increased efficiency 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 profits
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. Benefits developed countries B. Benefits underdeveloped countries
C. Benefits democratic countries D. Benefits 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 deficit in their balance of payments:

A. Sometimes B. Never
C. Alternate years D. Always
#A

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INTERNATIONAL BUSINESS MANAGEMENT (306)

Multiple Choice Questions – External Examination

2. Ultimately ----- was replaced by---- on 1st January 1995.

3. Which of the following is an advantage of turnkey projects?

5. The following is an export intermediary:

6. Global companies can----------- its experience to expand its global operations.

8. typically offer more flexibility in international markets

10. The International Monetary Fund is important because:

13. Which of the following could be defined as a multinational company?

14. What functions do financial institutions traditionally perform?

16. Which of the following constitutes Foreign Direct Investment?

18. General Agreement on Trade in Services will not be applicable to

19. As a part of WTO guidelines, Agreement on Agriculture (AOA) doesn’t consider

20. Quantitative restrictions refer to limit set by countries to curb

21. A Most Favored nation status doesn’t necessarily refers to

23. Which of the following is not an International Financial Institution?

25. The country that attract the largest FDI inflow is

28 The balance of payments of a country on current account is equal to

30 The main objective of International Monetary Fund (IMF) was to

31 Which of the following is not an International Financial Institution

32 The gains from two nations depend on

33 Interest payments on loans borrowed abroad are recorded in

34 The world bank is known as

35 Which one is not the form of FDI

Capitalistic, communistic and Mixed are the types of ______.

______ is not an Indian Multinational Company.

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.

d. None of the above

MNC Stands for ______.

________ is the first step in the internationalization process.

SMEs stands for ______.

a. Small and Medium Entrepreneurs

b. Small Management of Enterprises

c. Small and Medium-sized Enterprises.

d. Societies for Managing Exports

a. Organization for Economic Co-operation and Development

b. Organization for Economic Coordination and Development

d. Organization for Environmental Control and Development

The Theory of Absolute Cost Advantage is given by ______

BOP stands for ________.

3. If a commodity X is subject to an import duty of 25% ad valorem, the nominal tariff is

4. Reduction in subsidies and domestic support

7. The Theory of Absolute Cost Advantage is given by

8. The Theory of Relative Factor Endowments is given by

9. The theory of comparative cost advantage is given by

11. Capitalistic, communistic and Mixed are the types of

12. Which is not an Indian Multinational Company?

13. Globalization refers to:

2. Business across several countries with some decentralization of management decision

3. Land as a factor of production is immobile

4. Immobility of labour among nations is

5. Uneven distribution of natural resources

7. Free international trade maximizes world output through

8. International business does not result in the following

10. By having business in different countries, a firm reduces

11. Wholly owned subsidiary can be set up

12. The essential feature of FDI is

13. No new investment in the host country is created in the case of

15. The disadvantages of Greenfield FDI as compared to acquisition is