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MBA-I / SEM-II/ 2019 PATTERN

Multiple Choice Questions

[208] – [Geopolitics & World Economic Systems]

Unit – I Introduction to Global Economic & political Systems

Sr.No Question Answer

Economic development refers to
a. Economic growth D
b. Economic growth plus changes in output distribution and economic
1
structure.
c. Improvement in the well-being of the urban population.
d. Sustainable increases in Gross National Product.
OPEC is the
a. Organization of Petroleum Exporting Country
b. Organization of Pre- European Commission.
2 B
c. Oil Producing Economies Caucus
d. Organization of Problematic Economies Committee.
Which of the following could not be considered a major economic
system?
a. Capitalism
3 D
b. Communism
c. Socialism
d. Physical quality of life index
Which of the following is true of a constitutional democracy?
a. Majority rule is limited.
b. All minorities combined must have power equal to that of the majority
4 A
c. Minorities must have their own representation in the legislature.
d. Elections are free and fair but held very infrequently.
The Human Development Index (HDI) summarizes a great deal of
social performance in
a. Single composite index, combining disparity reduction rate, human
5 A
resource development rate and the composite index.
b. Longevity, education and living standard.
c. Minimum schooling, adult literacy and tertiary educational attainment.
d. Human resource training, development and R&D.
6 According to the text, basic needs include
a. food, clothing and housing
b. Health, education and quality housing.
B
c. Adequate nutrition, primary education, health, sanitation, water supply and
housing.
d. longevity and living standards
7 As economic development proceeds, income inequality tends to follow
a(n) __________ curve

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a. Convex
b. Inverted U-shaped. B
c. L-shaped
d. S-Shaped

According to Lewis’s model, the dual economy grows only when

a. the modern sector increases its output share relative to the traditional sector
b. agricultural sector uses modern equipment
8 D
c. agricultural sector hires labor economically
d. modern manufacturing sector is labor-intensive
Dual economies are countries
a. with double capital and labor
b. With a modern manufacturing sector as well as traditional agriculture
9 B
sector.
c. that specialize in labor-intensive products more than capital-intensive
products
d. with foreign-owned and domestically-owned capital
The vicious circle theory states that
a. growing government assistance create addiction to welfare programs
b. low income levels create pressure for money creation
D
c. low income levels create pressure for cheap imports
10 d. low per capita income creates low savings that keep incomes low
11 The Harrod-Domar growth model suggests that growth is
a. directly related to savings and inversely related to the capital/output ratio
b. directly related to the capital/output ratio and inversely related to savings
D
c. indirectly related to savings and the capital/output ratio
d. Directly related to savings and the capital/output ratio.
12 Which of the following was not a classical economist?
a. Adam Smith.
b. Thomas R. Malthus.
D
c. John Stuart Mill
d. John Maynard Keynes.
13 Income inequalities are often shown on a
a. production possibility curve
b. marginal inequality curve
D
c. Sen curve
d. Lorenz curve
14 A value of 1 in Gini index represents
a. low inequality
b. Maximum inequality.
B
c. 10/10, 000% inequality
d. 1% inequality
15 A period of rapid population growth between a preindustrial, stable
population characterized by high birth and death rates and a later,
modern, stable population marked by low fertility and mortality is
known as
A
a. demographic transition
b. population maturity
c. demobilizing population
d. birth-death transformation

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16 Which of the followings is not a variety of capitalism?

a) Market oriented capitalism
b) Social Market capitalism
C
c) Hegemonic stability
d) Development capitalism
17 Which of the followings best describes the phenomenon that refers to
either economics or an interdisciplinary academic discipline that
analyses economics, politics and international relations? D
a) Mixed Economy
b) Economics System
c) Liberalization
d) International political economy
18 Which of the followings is not an approach to political economy?
a) New Political economy
b) International Political economy C
c) Privatization
d) Interdisciplinary studies
19 What is known as a worldwide economic activity between various
countries that are considered intertwined and the thus can affect other
countries negatively or positively? B
a) Business Environment
b) Global Economy
c) Social-Culture
d) None of the above

20 -------- refers to the sector which helps in providing finished products to

be used in industries.
a) Primary Sector D
b) Agriculture
c) Mining
d) Secondary Sector
21 The ----------- is a powerful and rich state that is dedicated to the
international system of providing public goods.
a) Superpower C
b) LDC
c) Hegemon
d) None of the above
22 ------------ is an economic organization of society in which the material
means of production are owned by the whole community and operated
by organs representations of and responsible to the community. A
a) Socialism
b) Capitalism
c) Economy
d) Mixed economy
23 What is called a system of economic organization featured by the
private ownership and the use for private profit of man-made and B
nature made capital?

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a) Socialism
b) Capitalism
c) Economy
d) PPP
24 What do we call an economy where both public and private institution
exercise economic control?
a) Political Economy B
b) Mixed Economy
c) Capitalism
d) None of the above
25 ___________ is an economic system organized on individual lines,
meaning that the greatest possible numbers of economic decision are
made by individuals or households rather than by collective institution A
or organizations.
a) Economic Liberalism
b) Socialism
c) Mercantilism
d) Marxism

Unit-II

The Trading System

Sr.No Question Answer

1 _______ is the system of interference or intervention from
government in global business
a) Trade Strategy
A
b) Product Strategy
c) Promotion Strategy
d) Distribution Strategy
Trade between two countries can be useful if cost ratios of goods
are:
2 a) Undetermined D
b) Decreasing
c) Equal
d) Different
3 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 B
c) The countries which have adopted Euro as their currency
d) The market in which Euro is exchanged for other currencies
4 Which of the following theories suggests that firms seek to
penetrate new markets over time?
a) Imperfect Market Theory
B
b) Product cycle theory
c) Theory of Comparative Advantage
d) None of the above

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Dumping refers to:

a) Reducing tariffs
b) Sale of goods abroad at low a price, below their cost and price in
5 home market B
c) Buying goods at low prices abroad and selling at higher prices
locally
d) Expensive goods selling for low prices
6 International trade and domestic trade differ because of:
a) Different government policies
b) Immobility of factors
c) Trade restrictions D
d) All of the above
The margin for a currency future should be maintained with the
clearing house by
7
a) The seller
b) The buyer D
c) Either the buyer or the seller as per the agreement between them
d) Both the buyer and the seller
The following statement with respect to currency option is wrong
a) Foreign currency- Rupee option is available in India
8 D
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
Govt. policy about exports and imports is called:
a) Commercial policy
b) Fiscal policy
9 c) Monetary policy A
d) Finance policy
Which of the following is international trade:
a) Trade between countries A
b) Trade between regions
10 c) Trade between provinces
d) Both (b) and (c)
11 Market in which currencies buy and sell and their prices settle on is
called the
a) International bond market
b) International capital market C
c) Foreign exchange market
d) Eurocurrency market
12 Which of the following is an argument for free trade _______?
a) prevents monopolies A
b) unfavorable terms of trade
c) unfavorable balance of payments
d) allows monopolies
13 Trade barriers are often called ______.
a) Free trade
b) Protection
B
c) Trade wars
d) Economic integration
14 Imposing of tariff, raises domestic prices causing fall in consumption C
of domestic goods is ____

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a) Protective effect
b) Revenue effect
c) Consumption effect
d) Terms of trade effect
15 ______ is the World’s largest single market area.
a) European Union
b) India
A
c) Pakistan
d) Srilanka
16 At present, European Union consist of _________ member countries
a) 26
b) 27
C
c) 28
d) None of these above
17 ________ became an ASEAN dialogue partner in 1995
a) India
b) Pakistan
A
c) Srilanka
d) USA
ASEAN was formed in
18 a) 1947
b) 1967
A
c) 1977
d) 1987
_____ is a statement of a systematic record of all economic
transactions between one country and the rest of the world
a) Deficit
19 b) Surplus C
c) Balance of payments
d) Budget
Which of the following Non – Tariff Barriers prevents free movement
of capital between countries?
20
a) preferential government procurement
b) Exchange Controls B
c) Domestic subsidies
d) Local content requirement
21 WTO replaced _____ in 1995.
a) GATT A
b) WTO
c) UN
d) UNESCO
22 TRIPs stand for
a) Trade Related Investment Property Rights
b) Trade Related Investment Public Rights
C
c) Trade Related Intellectual Property Rights
d) Trade Related Investment in services
23 ____ Policy is also called Import-substitution Policy (ISP).
a) Business Policy
C
b) Outward –oriented Policy

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c) Inward-Oriented Policy
d) None of these
24 _______ aims to erect barriers between countries through tariffs,
taxes, import quotas, etc.
D
a) Free Trade
b) Globalization
c) Liberalization
d) Protectionism
25 The _________ is a multilateral trade agreement and is often cited as
the engine which people international trade.
a) GATT
b) WTO A
c) UNCTAD
d) EXIM
26 When GATT Was established?
a) January,1948
b) April, 1948
c) January, 1949 A
d) April,1949

27 _______ is a global institution which deals with the set of laws to

administer and liberalize international trade between different nations.
a) UNCTAD
b) WTO B
c) GATT
d) FEMA

28 The headquarters of WTO is at_________

a) Geneva
b) Tokyo
c) UK A
d) America
29 _____ has a common external trade policy with no trade barriers on
its member countries.
a) Common Market
b) Customs Union A
c) Free Trade Area
d) Economic Union

30 The OECD______ is the organization’s overreaching decision-making

body
a) Committees
b) Council B
c) Secretariat
d) None of these

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Unit-III

International Trade Laws

Sr.No Question Answer

1 One of the following is international trade?
a)Trade between countries
b)Trade between regions
c)Trade between provinces A
d)Both B and C
e)None of these
2 In trade, Transportation cost affects____
a) pattern of trade
b) Global supply chains
c) boundaries between tradable and non-tradable goods E
d) Both A and B
e) All of these
3 One of the following is NOT an advantage of international trade?
a) Import of defense material
b) Dependence on foreign countries
c) Export of surplus production B
d) Availability of cheap raw materials
e) None of these
In trade policies _____limits specified the number of goods to be
imported at one tariff rate.
a) Specific tariff
4 b) Import tariff C
c) Quota
d) Both A and B
e) None of these
We can trade between the two countries and this trade is very
helpful if the cost ratios of goods are____.
a) Decreasing
5 b) Undetermined C
c) Different
d) Equal
e) None of these
Charter of Human Rights adopted in____year
1948
1952
6 1947 A
None of these

7 Two countries gain foreign trade with____.

a) Tariff rates are different D
b) Cost ratios are different
c) Price ratios are different
d) Both B and C

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e) None of these
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