McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Master of Commerce (M.com) .
Chapters
| 1. |
What are the four factor endowments? |
| A. | national resources, labor, physical capital and human capital |
| B. | types of technology |
| C. | material inputs used up in the process of production |
| D. | international differences in climate |
| Answer» A. national resources, labor, physical capital and human capital | |
| 2. |
The Heckscher- Ohlin model is principally focused on what aspect of economics? |
| A. | international trade |
| B. | supply and demand |
| C. | normative economics |
| D. | production possibility frontier |
| Answer» A. international trade | |
| 3. |
A no-trade world will have which of the following characteristics: |
| A. | countries will have same relative endowments of production factors |
| B. | consumers across countries will have identical and homogenous tastes |
| C. | there will be no distortions or externalities |
| D. | all of the above |
| Answer» D. all of the above | |
| 4. |
Transportation cost of trade affects: |
| A. | pattern of trade |
| B. | boundaries between tradable and non-tradable goods |
| C. | global supply chains |
| D. | all of the above |
| Answer» D. all of the above | |
| 5. |
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 | |
| 6. |
What was the first economic theory of international trade to be developed? |
| A. | the theory of mercantilism |
| B. | the theory of comparative advantage |
| C. | the theory of absolute advantage |
| D. | the heckscher-ohlin theory |
| Answer» A. the theory of mercantilism | |
| 7. |
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 | |
| 8. |
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 | |
| 9. |
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 | |
| 10. |
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. | |
| 11. |
According to the principle of comparative advantage: |
| A. | south korea should export steel |
| B. | south korea should export steel and dvds |
| C. | japan should export steel |
| D. | japan should export steel and dvds |
| Answer» A. south korea should export steel | |
| 12. |
Country A has an absolute advantage in |
| A. | product x |
| B. | product y |
| C. | neither x nor y |
| D. | both x and y |
| Answer» B. product y | |
| 13. |
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 | |
| 14. |
Comparative Cost Trade Theory is given by |
| A. | adam smith |
| B. | david ricardo |
| C. | gottfried haberle |
| D. | heckscher ohlin |
| Answer» B. david ricardo | |
| 15. |
……………...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 |
| Answer» B. letter of credit | |
| 16. |
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» C. marketing activities and plans | |
| 17. |
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» A. world war i | |
| 18. |
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 |
| Answer» C. mercantilism | |
| 19. |
The Theory of Absolute Cost Advantage is given by |
| A. | david ricardo |
| B. | adam smith |
| C. | f w taylor |
| D. | ohlin and heckscher |
| Answer» B. adam smith | |
| 20. |
The Theory of Relative Factor Endowments is given by |
| A. | david ricardo |
| B. | adam smith |
| C. | c. f w taussig |
| D. | ohlin and hecksher |
| Answer» D. ohlin and hecksher | |
| 21. |
The theory of comparative cost advantage is given by |
| A. | david ricardo |
| B. | adam smith |
| C. | f w taussig |
| D. | ohlin and heckscher |
| Answer» A. david ricardo | |
| 22. |
A multinational is a firm that controls and manages production facilities in |
| A. | both developed and developing countries |
| B. | at least two countries |
| C. | one country but relies on multiple markets for the consumption of goods it produces |
| D. | at least two developed countries and one developing country |
| Answer» B. at least two countries | |
| 23. |
Locational advantages are based on which combination of the following specific country characteristics |
| A. | a large reserve of natural resources, a large local market and efficiency opportunities |
| B. | a small reserve of natural resources, a large local market and efficiency opportunities |
| C. | a small reserve of natural resources, a small local market and efficiency opportunities |
| D. | a large reserve of natural resources, a small local market and efficiency opportunities |
| Answer» A. a large reserve of natural resources, a large local market and efficiency opportunities | |
| 24. |
Horizontal integration occurs when |
| A. | firm creates singular country production facilities, each of which produces different good or goods |
| B. | firm creates multiple production facilities, each of which produces the same good or goods. |
| C. | firm creates multiple production facilities, each of which produces different good or goods |
| D. | firm creates singular country facilities, each of which produces the same good or goods |
| Answer» B. firm creates multiple production facilities, each of which produces the same good or goods. | |
| 25. |
Which of the following would be an example of foreign direct investment from the United States to Taiwan? |
| A. | a u.s. bank buys bonds issued by a taiwan computer manufacturer. |
| B. | a u.s. car manufacturer enters into a contract with a taiwan firm to make and sell it spark plugs. |
| C. | microsoft hires a taiwanese computer programmer to debug some software for it. |
| D. | the state of california rents space in taipei for one of its employees to use promoting tourism in |
| Answer» B. a u.s. car manufacturer enters into a contract with a taiwan firm to make and sell it spark plugs. | |
| 26. |
If a German manufacturer of household appliances wants to take advantage of the cheaper labor available in the Czech Republic, which of the following actions will not serve that purpose? |
| A. | build a manufacturing subsidiary there and employ czech workers. |
| B. | build a plant in the czech republic and send all german workers to operate it. |
| C. | license a czech firm to produce its products under its own label. |
| D. | contract for a czech firm to do some of the processing for it. |
| Answer» B. build a plant in the czech republic and send all german workers to operate it. | |
| 27. |
Which of the following was created in an effort to promote free trade? |
| A. | world trade organization |
| B. | the sarbanes-oxley act |
| C. | multilateral development banks |
| D. | the organization for economic cooperation and development |
| Answer» A. world trade organization | |
| 28. |
. Removing barriers or restrictions set by the government is called: |
| A. | liberalisation |
| B. | investment |
| C. | favorable trade |
| D. | free trade |
| Answer» A. liberalisation | |
| 29. |
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 | |
| 30. |
Subsidiaries consider the regional environment for policy / Strategy formulation is known as |
| A. | polycentric approach |
| B. | regionocentric approach |
| C. | ethnocentric approach |
| D. | geocentric approach |
| Answer» B. regionocentric approach | |
| 31. |
. Which is not an Indian Multinational Company? |
| A. | unilever |
| B. | asian paints |
| C. | piramal |
| D. | wipro |
| Answer» A. unilever | |
| 32. |
Select example of Indian Multinational Company |
| A. | hindustan unilever |
| B. | videocon |
| C. | cargill |
| D. | tesco |
| Answer» B. videocon | |
| 33. |
…………………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» A. global | |
| 34. |
The —————-company produces, markets, invests and operates across the world |
| A. | global |
| B. | international |
| C. | transnational |
| D. | multinational |
| Answer» C. transnational | |
| 35. |
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. multinational business. | |
| 36. |
Immobility of labor 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. relatively of a higher degree than among regions in the same country. | |
| 37. |
The following factor does not differentiate international business from domestic business |
| A. | different currencies |
| B. | product quality |
| C. | product mobility |
| D. | trade policies |
| Answer» B. product quality | |
| 38. |
By entering into international business, a firm expects 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. any or all spheres of marketing, operation and finance. | |
| 39. |
Ultimately ………………was replaced by the …………….on 1st Jan 1995 |
| A. | gats, wto |
| B. | wto, gatt |
| C. | gatt, wto |
| D. | imf, gatt |
| Answer» C. gatt, wto | |
| 40. |
_______ is the first step in the internationalization process. |
| A. | license |
| B. | foreign investment |
| C. | sales |
| D. | export |
| Answer» A. license | |
| 41. |
In the foreign exchange market, the ________ of one country is traded for the ________ of another country. |
| A. | currency; currency |
| B. | currency; financial instruments |
| C. | currency; goods |
| D. | goods; goods |
| Answer» A. currency; currency | |
| 42. |
By definition, currency appreciation occurs when |
| A. | the value of all currencies falls relative to gold. |
| B. | the value of all currencies rises relative to gold. |
| C. | the value of one currency rises relative to another currency. |
| D. | the value of one currency falls relative to another currency |
| Answer» C. the value of one currency rises relative to another currency. | |
| 43. |
Hedging is used by companies to: |
| A. | decrease the variability of tax paid |
| B. | decrease the spread between spot and forward market quotes |
| C. | increase the variability of expected cash flows |
| D. | decrease the variability of expected cash flows |
| Answer» D. decrease the variability of expected cash flows | |
| 44. |
Exchange rates |
| A. | are always fixed |
| B. | fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied |
| C. | fluctuate to equate imports and exports |
| D. | fluctuate to equate rates of interest in various countries |
| Answer» B. fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied | |
| 45. |
If the U.S. dollar appreciates relative to the British pound, |
| A. | it will take fewer dollars to purchase a pound |
| B. | it will take more dollars to purchase a pound |
| C. | it is called a weakening of the dollar |
| D. | both a & c |
| Answer» A. it will take fewer dollars to purchase a pound | |
| 46. |
A floating exchange rate |
| A. | is determined by the national governments involved |
| B. | remains extremely stable over long periods of time |
| C. | is determined by the actions of central banks |
| D. | is allowed to vary according to market forces |
| Answer» D. is allowed to vary according to market forces | |
| 47. |
In a quote exchange rate, the currency that is to be purchase with another currency is called the |
| A. | liquid currency |
| B. | foreign currency |
| C. | local currency |
| D. | base currency |
| Answer» D. base currency | |
| 48. |
An economist will define the exchange rate between two currencies as the: |
| A. | amount of one currency that must be paid in order to obtain one unit of another currency |
| B. | difference between total exports and total imports within a country |
| C. | price at which the sales and purchases of foreign goods takes place |
| D. | ratio of import prices to export prices for a particular country |
| Answer» A. amount of one currency that must be paid in order to obtain one unit of another currency | |
| 49. |
India is facing continuous deficit in its balance of payments. In the foreign exchange market rupee is expected to |
| A. | depreciate. |
| B. | appreciate. |
| C. | show no specific tendency. |
| D. | depreciate against currencies of the countries with positive balance of payment and appreciate against |
| Answer» A. depreciate. | |
| 50. |
The demand for domestic currency in the foreign exchange market is indicated by the following transactions in balance of payment |
| A. | export of goods and services |
| B. | import of goods and services. |
| C. | export of goods and services and capital inflows. |
| D. | import of goods and services and capital outflows. |
| Answer» C. export of goods and services and capital inflows. | |
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