70+ International Business Environment Solved MCQs

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
Answer» B. Resources are not equally distributed among all trading nations.
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
Answer» B. Import-competing industries
3.

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» D. A more integrated and interdependent world
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
Answer» C. Place constraints on the wages of domestic workers
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
Answer» B. Import-competing industries.
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
Answer» D. All of the above
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
Answer» D. Conducts trade with other countries
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
Answer» D. Only when a country has an absolute advantage
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
Answer» A. Promoting exports and discouraging imports
10.

Investment in Plant & machinery is termed as

A. FDI
B. FII
C. Portfolio Investment
D. Capital Investment
Answer» D. Capital Investment
11.

The traditional mode of entering into international business is

A. Licensing
B. Exporting
C. Joint venture
D. Subsidiary
Answer» B. Exporting
12.

Which type of following stage of internationalization has Decentralized decision making?

A. Subsidiary
B. Multinational Corporation
C. Transnational corporation
D. Domestic Company
Answer» C. Transnational corporation
13.

Agreement between two parties where in one gives rights to use their intangible property to another entity is called as

A. Direct Exporting
B. Turnkey project
C. Strategic alliance
D. Licensing
Answer» D. Licensing
14.

Only manufacturing and exporting as per the requirement of importer is called

A. Direct Export
B. Sales
C. Import
D. Indirect Export
Answer» D. Indirect Export
15.

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
Answer» C. Turnkey Project
16.

Rapid integration or interconnection between countries is known as:

A. Globalisation
B. Liberalisation
C. Socialisation
D. Privatisation
Answer» A. Globalisation
17.

Globalisation has improved in the living structure of

A. All the people
B. Workers in Developing Countries
C. People in developed Countries
D. None of the above
Answer» C. People in developed Countries
18.

The main reason behind MNCs investments are

A. 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
Answer» D. To increase assets & earn profits
19.

Which institute supports investments and foreign trade in India?

A. IMF
B. WTO
C. World Bank
D. International labour Organisation ( ILO)
Answer» B. WTO
20.

Which 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
Answer» D. It employs labour only from its own country
21.

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
Answer» B. More than one country
22.

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
Answer» B. Domestic, International, Multinational, Global, Transnational
23.

Which of the following business environment are known and controllable?

A. Domestic business Environment
B. Foreign business Environment
C. International business Environment
D. None
Answer» A. Domestic business Environment
24.

Forces that impacts business environment due to change in government is type of

A. Legal
B. Cultural
C. Social
D. Political
Answer» D. Political
25.

Which of the following is not cultural factor?

A. Language
B. Income
C. Beliefs
D. Customs
Answer» B. Income
26.

Rise in prices due imbalance between demand and supply is called as

A. GDP
B. Inflation
C. Deflation
D. None of the above
Answer» B. Inflation
27.

Culture spreads from one place to another and such transmission is called as ________.

A. difference.
B. reputation.
C. adoption.
D. heritage.
Answer» A. difference.
28.

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. Values rights and duties.
29.

India follows the ________political system

A. Authoritarian
B. Parliamentary
C. Absolutist system
D. Military dictatorship
Answer» B. Parliamentary
30.

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
Answer» C. Both a & B
31.

India is the best example of

A. Market Economy
B. Capitalist economy
C. Mixed Economy
D. Socialist Economy
Answer» C. Mixed Economy
32.

Which 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
Answer» D. Disclosure of Financial Statement
33.

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
Answer» D. Both A & B
34.

Commitment, competence and consistency are three distinct characteristics that result in ______________

A. Culture building
B. Values
C. Organizational socialization
D. Attitudes
Answer» A. Culture building
35.

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
Answer» A. Social responsibility
36.

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.
Answer» C. The sense of belonging of a people
37.

Corporate governance is a form of

A. External regulation
B. Self regulation
C. Government control
D. Charitable action
Answer» B. Self regulation
38.

CSR & corporate governance represent a -------- between business and society.

A. Social climate
B. Special contract
C. Special climate
D. Social contract
Answer» D. Social contract
39.

Corporate governance is concerned with the formation of …………… term objective

A. Very short
B. Short
C. Medium
D. Long
Answer» D. Long
40.

The Current System of International Finance is a

A. gold standard
B. Fixed Exchange rate system
C. Floating exchange rate system
D. Managed Float Exchange rate system
Answer» D. Managed Float Exchange rate system
41.

More expansion of foreign direct investment can boost __________ .

A. Money circulation
B. Demand
C. Employment
D. Unemployment
Answer» C. Employment
42.

More expansion of foreign direct investment can boost

A. Money Circulation
B. Demand
C. Employment
D. Unemployment
Answer» C. Employment
43.

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.
D. None of the above
Answer» A. The new definition considers 5% investment in capital of an unlisted company as FPI.
44.

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
Answer» A. 74
45.

OLI Theory is also known as

A. The transaction cost approach
B. The Eclectic Paradigm
C. The strategic linkage theory
D. Perfect market hypothesis
Answer» B. The Eclectic Paradigm
46.

Which country leads the inflow of FDI in India?

A. Mauritius
B. France
C. USA
D. UK
Answer» A. Mauritius
47.

In which of the following sectors does the Government of India allow more than 50% FDI?

A. Insurance
B. Print media
C. Telecommunications
D. Both A & C
Answer» D. Both A & C
48.

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
Answer» B. Strategic alliance
49.

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
Answer» C. The Leapfrogging theory
50.

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
Answer» D. Greenfield investment
51.

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. FII invests in technology-oriented enterprises, whereas FDI invests in traditional business set ups.
52.

: 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
Answer» C. Both 1 and 2
53.

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
Answer» A. 1, 2, 3, and 4
54.

The value of Special Drawing Right (SDR) is determined by the basket of ......currencies.

A. 4
B. 5
C. 6
D. 7
Answer» B. 5
55.

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
Answer» D. To provide loan to private sectors
56.

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
Answer» C. International Monetary Fund
57.

Which of the following is known as the Paper Gold?

A. US Dollar
B. Pound
C. Demand draft
D. Special Drawing Right
Answer» D. Special Drawing Right
58.

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
Answer» B. To reconstruct the economies damaged during the Second World War
59.

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
Answer» A. Every member country of the IMF automatically becomes the member of the World Bank
60.

Which of the following institutions is not part of the World Bank community?

A. IBRD
B. WTO
C. IDA
D. IFC
Answer» B. WTO
61.

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
Answer» B. Developing Countries
62.

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
Answer» A. 5 Year
63.

Which of the following does not form part of current account under balance of payments?

A. Export and import of goods
B. Export and import of services
C. Income receipts and payments
D. Capital receipts and payments
Answer» D. Capital receipts and payments
64.

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. Portfolio investment payments – Debit in the current account
65.

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. It is required to borrow money to make interest payments on outstanding loans
66.

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. Nation’s net exports of financial claims
67.

Where is the headquarter of the WTO?

A. . New York
B. . Washington DC
C. . Geneva
D. . Austria
Answer» C. . Geneva
68.

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. .WTO was officially constituted on 1 January 1991.
69.

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. . To improve the Balance of Payment situation of the member countries
70.

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. . Exchange Rate Management Body
71.

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. IMF & International Bank for Reconstruction and Development (IBRD)
72.

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. World Trade Organization
73.

As per Indian GAAP Financial statements are prepared at :

A. Market value
B. Fair value
C. Cost
D. All of the above
Answer» B. Fair value
74.

total no. Of IFRS is

A. 14
B. 16
C. 17
D. 18
Answer» C. 17
75.

How many Ind As are there in India

A. 21
B. 39
C. 41
D. 32
Answer» C. 41
76.

The accounting standards are mandatory for

A. Sole proprietor
B. Companies
C. Firms
D. societies
Answer» B. Companies
77.

what is the Impact of Pandemic COVID-19 on international trade.

A. Long term
B. Short term
C. Both a& b
D. Only a
Answer» C. Both a& b
78.

Outsourcing has been raising –

A. Nationally
B. Internationally
C. Both a & b
D. Only a
Answer» C. Both a & b
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