Introduction to Business Environment
Business is any activity undertaken for the purpose of producing or selling a particular commodity orr service and earns a profit. The business has several dimensions such as purchasing the inputs, converting the inputs into the output, selling that output at a profitable price. Every dimension of a business depends upon several factors. Hence a business is influenced by several factors, all them put together are described as Business Environment.
About Business Environment MCQs
In this post you will get Business Environment MCQs which especially for UGC NET and SET exams of various states such as SLET NE, GSET, WBSET. JKSET, Rajasthan SET, MP SET, MH SET, KSET and Kerala SET.
We try to cover all the questions asked in above mentioned exams relating to Business Environment MCQs. Visit our website regularly for latest contents.
Business Environment MCQs for UGC NET and SET Exams
1. In the analysis of economic environment there are certain economies which are in the transition from centralized economic system to market economy. They are referred to as: [GSET]
(A) Transitory economies.
(B) Transition economies.
(C) Developing economies.
(D) Open economies.
Ans: (B) Transition economies.
2. Who presides over the National Development Council? [GSET]
(A) The Chairman of the Planning Commission.
(B) The Secretary of National Development Council.
(C) The Finance Minister of Central Government.
(D) The Prime Minister of India.
Ans: (D) The Prime Minister of India.
3. Which of the following statements is correct? [GSET]
(A) A legal protection granted for an invention that is new, non-obvious and useful is called a trade mark.
(B) Trade and Merchandize Marks Act, 1958 was first implemented in Gujarat.
(C) Trademark Act was made in 1997.
(D) A part of Brand which can be recognized but is not utterable is called a Brand-mark.
Ans: (D) A part of Brand which can be recognized but is not utterable is called a Brand-mark.
4. Which one of the following is correct? [GSET]
(A) The MRTP Act, 1969 was replaced by Competition Act, 2010.
(B) The MRTP Commission was replaced by Competition Commission.
(C) The New MRTP Act took the place of Competition Commission.
(D) Competition Policy and the EXIM Policy are almost same.
Ans: (B) The MRTP Commission was replaced by Competition Commission.
5. In globalization the _______ is a very common strategy of entering into foreign market. [GSET]
(A) Licensing.
(B) Management Designs.
(C) Joint-ventures.
(D) Manufacturing.
Ans: (C) Joint-ventures.
6. One element of the following items is not related with Consumer Right: [GSET]
(A) Right against exploitation by unfair trade practices.
(B) Right to a physical environment enhancing quality of life.
(C) Right to Express.
(D) Right to choose the best from the variety of offers.
Ans: (C) Right to Express.
7. Match the items of the List I and Items of the List II and choose the correct option from the codes given below: [GSET]
|
List I |
List II |
|
(a) Privatisation. (b) Open Market Operations. (c) Minimum Support Price. (d) Liberalisation. |
(1) Agricultural Price Policy. (2) Phasing out trade barriers. (3) Purchase and Sale of Govt. Securities. (4) Encourages entrepreneurship. |
Codes:
(A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(B) (a)-(2), (b)-(3), (c)-(4), (d)-(1).
(C) (a)-(3), (b)-(1), (c)-(2), (d)-(4).
(D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
Ans: (D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
8. Assertion (A): The Structural Adjustment Programme (SAP) has been forced on the economy. [GSET]
Reason (R): Excess of consumption and expenditure over the revenue, resulting in heavy government borrowing.
(A) Reason given is not an appropriate explanation.
(B) (R) is one of the reasons for (A).
(C) (A) and (R) are not at all related.
(D) (R) is not appropriate measure for structural adjustment of economy.
Ans: (B) (R) is one of the reasons for (A).
9. Drivers of globalisation include: [GSET]
(1) Establishment of W.T.O.
(2) Regional Integration.
(3) Private Law.
(4) Growth in FDI.
(5) Growth of MNCs.
Select the appropriate set of drivers:
(A) (1), (5), (3).
(B) (1), (2), (4), (5).
(C) (2), (3), (4).
(D) (1), (3), (4), (5).
Ans: (B) (1), (2), (4), (5).
10. Which inventory issue pricing method assumes that the inventory units available for sale are homogeneous? [GSET]
(A) Specific identification method.
(B) Last-in, First-out method.
(C) First-in, First-out method.
(D) Weightage-average cost method.
Ans: (D) Weightage-average cost method.
11. Michael Porter’s well known model in the area of business environment is known as _______. [GSET]
(A) A model of structural analysis of industries.
(B) A model of economic analysis.
(C) A model of legal analysis.
(D) A model of transformation.
Ans: (A) A model of structural analysis of industries.
12. Which of the following statements about economic policies is not correct? [GSET]
(A) Trade policy is often not integrated with the industrial policy.
(B) Industrial policy defines the scope and role of different sectors.
(C) Foreign exchange rate policy is based on liberalization.
(D) Fiscal policy affects the development of various regions and sectors.
Ans: (A) Trade policy is often not integrated with the industrial policy.
13. Read the following statements carefully: [GSET]
Statement (1): The planning system is an important part of business environment.
Statement (2): The direction of development pattern is determined by the five year plans.
Now select the correct answer about these two statements:
(A) Statement (1) is true, (2) is false.
(B) Statement (1) is false, (2) is true.
(C) Statements (1) and (2) are correct.
(D) Statements (1) and (2) are incorrect.
Ans: (C) Statements (1) and (2) are correct.
14. A kind of practice that involves over invoicing or under-invoicing of intermediate goods (or inputs) between foreign affiliates is called: [GSET]
(A) Fixed price strategy.
(B) Tender price policy.
(C) Temporal price policy.
(D) Transfer pricing policy.
Ans: (D) Transfer pricing policy.
15. Which one of the following is not the driver of globalization? [GSET]
(A) Higher trade barriers and more population stability.
(B) Foreign direct investment.
(C) Foreign institutional investment.
(D) Technological advances.
Ans: (A) Higher trade barriers and more population stability.
16. Shareholders, Employees, Customers are known as _______ of the company. [GSET]
(A) Owners.
(B) Borrowers.
(C) Creditors.
(D) Stakeholders.
Ans: (D) Stakeholders.
17. In the recently revised tax structure, GST stands for the _______. [GSET]
(A) General Structure of Tax.
(B) Goods and Services Tax.
(C) Genuine Standard Tax.
(D) Goods Plus Service Tax.
Ans: (B) Goods and Services Tax.
18. The Consumer Protection Act came into force in the year: [GSET]
(A) 1984.
(B) 1985.
(C) 1986.
(D) 1988.
Ans: (C) 1986.
19. The process of reducing the Equity Participation in the Public Sector Company by the Government is known as: [GSET]
(A) Globalisation.
(B) Privatisation.
(C) Liberalisation.
(D) Modernisation.
Ans: (B) Privatisation.
20. The Re-named Planning Commission “NITI Ayog”, NITI stands for _______. [GSET]
(A) National Institute of Transparent India.
(B) National Institute of Training in India.
(C) National Institute of Transforming India.
(D) None of the above.
Ans: (D) None of the above.
21. The components of political environment include: [GSET]
(A) Legislative.
(B) Executive.
(C) Judiciary.
(D) All of the above.
Ans: (D) All of the above.
22. In a country, the rate of inflation is managed by: [GSET]
(A) Supply of money.
(B) Promotion of exports.
(C) Decrease in capital formation.
(D) Increase in imports.
Ans: (A) Supply of money.
23. Which one item is not the part of India’s annual budget? [GSET]
(A) Expenditure proposal.
(B) Tax proposal.
(C) Generation of capital formation.
(D) Major policy announcement.
Ans: (C) Generation of capital formation.
24. Foreign Trade (Development and Regulation) Act of 1992 was implemented: [GSET]
(A) For enhancing the volume of FDI.
(B) For regulating the FIIS.
(C) For facilitating imports in India.
(D) For generation of employment.
Ans: (C) For facilitating imports in India.
25. In which year PSUs were brought within the jurisdiction of the Board for Industrial and Financial Reconstruction: [GSET]
(A) 1985.
(B) 1991.
(C) 1995.
(D) 1998.
Ans: (B) 1991.
26. The unique features of business environment are: [GSET]
(A) Its forces are dynamic.
(B) A symbiotic relationship exists amongst the forces.
(C) A single firm cannot change it.
(D) All of the above.
Ans: (D) All of the above.
27. Economic planning is: [GSET]
(A) Part of economic environment.
(B) Done to promote large businesses.
(C) Done by business houses.
(D) None of the above.
Ans: (A) Part of economic environment.
28. Under the second generations reforms in India business firms: [GSET]
(A) were put under strict licensing regime.
(B) were not allowed to expand their business abroad.
(C) were given flexibility for entry and exist.
(D) were ordered to hire labor only from the local area only.
Ans: (C) were given flexibility for entry and exist.
29. Privatization process requires: [GSET]
(A) Changes in legislation.
(B) No planning.
(C) Financing by the government.
(D) More control by the government.
Ans: (A) Changes in legislation.
30. The most important aspect of Fiscal Policy for a business is: [GSET]
(A) Budget Deficit.
(B) Fiscal Deficit.
(C) Taxes.
(D) Subsidies.
Ans: (C) Taxes.
31. Which of the following statements is not correct? [GSET]
(A) Privatisation may mean that the management of a Public Enterprise can be privatized.
(B) Privatisation may mean that the enterprise operations can be privatized.
(C) Privatisation necessarily means that the public enterprise is to be sold to the private sector.
(D) Privatisation may mean marketisation of economic transactions.
Ans: (C) Privatisation necessarily means that the public enterprise is to be sold to the private sector.
32. Which from the following is one of the second generation reforms? [GSET]
(A) Agricultural reforms.
(B) Privatisation.
(C) Abolition of licensing.
(D) Foreign Exchange Reforms.
Ans: (A) Agricultural reforms.
33. The Disinvestment Policy was initiated by: [GSET]
(A) Atal Bihari Vajpayee’s Government.
(B) Narasimha Rao’s Government.
(C) Chandrasekhar’s’ Government.
(D) Sonia Gandhi’s Government.
Ans: (C) Chandrasekhar’s’ Government.
34. A corporate unit which has gone global is known as: [GSET]
(A) Euro Unit.
(B) Foreign Corporation.
(C) U.S. Corporation.
(D) Multinational Corporation.
Ans: (D) Multinational Corporation.
35. For small scale industries, credit facilities are provided by: [GSET]
(A) State Financial Corporation.
(B) Commercial Banks.
(C) State Industrial Development Corporation.
(D) All of the above.
Ans: (D) All of the above.
36. Internal environment is also called as: [GSET]
(A) Macro-environment.
(B) Micro-environment.
(C) International environment.
(D) Technological environment.
Ans: (B) Micro-environment.
37. Environmental scanning is done: [GSET]
(A) For increasing business environment.
(B) For giving new direction to the business.
(C) For creating new ventures in business.
(D) For meeting growing competition from the rivals.
Ans: (D) For meeting growing competition from the rivals.
38. Which one of the following is not a feature of capitalism? [GSET]
(A) No freedom in fixing the price.
(B) Freedom of enterprises.
(C) Profit maximization.
(D) Freedom of choice.
Ans: (A) No freedom in fixing the price.
39. Which one is not an element of second generation reforms? [GSET]
(A) High growth of agriculture.
(B) Growing Indian transnational corporations.
(C) Empowering the poor.
(D) HYVP and GRT.
Ans: (D) HYVP and GRT.
40. The liberalisation has: [GSET]
(A) expanded the scope of private sector.
(B) restricted the scope of private sector.
(C) maintained the status quo of private sector.
(D) expanded the scope of public sector.
Ans: (A) expanded the scope of private sector.
41. _______ expenditure is concerned with all current expenditure of the Government on administration. [GSET]
(A) Revenue Expenditure.
(B) Capital Expenditure.
(C) Total Expenditure.
(D) None of the above.
Ans: (A) Revenue Expenditure.
42. The credit of investing the word privatisation goes to the famous author: [GSET]
(A) Henry Fayol.
(B) Peter F. Drucker.
(C) Abraham Maslow.
(D) Mikhail Gorbachev.
Ans: (B) Peter F. Drucker.
43. The concept of Small Scale Industries was introduced by the _______. [GSET]
(A) Industrial Policy Resolution 1948.
(B) Industrial Policy Resolution 1956.
(C) Industrial Policy Resolution 1977.
(D) None of the above.
Ans: (C) Industrial Policy Resolution 1977.
44. The present status of Indian Economy is the example of _______. [GSET]
(A) Capitalist Economy.
(B) Closed Economy.
(C) Mixed Economy.
(D) None of the above.
Ans: (C) Mixed Economy.
45. Match the items of List I with the items of List II and select the correct answer using the codes given below the lists: [GSET]
|
List I |
List II |
|
(a) Capital Reserve. (b) Reserve Capital. (c) General Reserve. (d) Specific Reserve. |
(1) Uncommitted Reserve. (2) Uncalled share capital. (3) Profit on re-issue of forfeited shares. (4) Sinking Fund. |
Codes:
(A) (a)-(2), (b)-(1), (c)-(3), (d)-(4).
(B) (a)-(1), (b)-(3), (c)-(4), (d)-(2).
(C) (a)-(3), (b)-(2), (c)-(1), (d)-(4)
(D) (a)-(3), (b)-(1), (c)-(4), (d)-(2).
Ans: (C) (a)-(3), (b)-(2), (c)-(1), (d)-(4)
46. Process of Environmental Analysis includes: [GSET]
(A) Scanning, Measuring, Forecasting and Assessment.
(B) Scanning, Measuring, Forecasting and Approachment.
(C) Scanning, Monitoring, Forecasting and Assessment.
(D) Scanning, Monitoring, Fourth-coming and Assessment.
Ans: (C) Scanning, Monitoring, Forecasting and Assessment.
47. The Chairman of the NITI Ayog is: [GSET]
(A) Dr. Montek Singh Ahluwalia.
(B) Sh. Arun Jaitely.
(C) Sh. N. D. Modi.
(D) Sh. Rajnath Singh.
Ans: (C) Sh. N. D. Modi.
48. Which of the following is not a trading block? [GSET]
(A) NAFTA.
(B) ASEAN.
(C) SAARC.
(D) IMF.
Ans. (D) IMF.
49. Each member of International Monetary Fund (IMF) is assigned a quota expressed in: [GSET]
(A) Member Country’s Currency.
(B) US Dollar.
(C) Special Drawing Right.
(D) None of the above.
Ans: (C) Special Drawing Right.
50. A tariff on an imported goods levied by the importing country to counter the impact of foreign subsidies is known as: [GSET]
(A) Countervailing duty.
(B) Quota.
(C) Voluntary export restraint.
(D) Excise Duty.
Ans: (A) Countervailing duty.
51. Demand for foreign currency is determined by: [GSET]
(A) Volume of domestic exports.
(B) Volume of domestic imports.
(C) Value of domestic exports.
(D) Value of domestic imports.
Ans: (D) Value of domestic imports.
52. Which of the following is not a part of the structure of WTO? [GSET]
(A) Trade Policy Body.
(B) General Council.
(C) General Assembly.
(D) Dispute Settlement Body.
Ans: (C) General Assembly.
53. In India _______ has predominant share in the debt market. [GSET]
(A) Government Securities.
(B) Corporate Deposits.
(C) Corporate Equity.
(D) Global Depository Receipts.
Ans: (A) Government Securities.
54. Bill of lading is issued by: [GSET]
(A) Indian Commercial Banks.
(B) Foreign Banks.
(C) Shipping Company.
(D) Exporters.
Ans: (C) Shipping Company.
55. The Devaluation of Currency of Country is down when: [GSET]
(I) It has adverse balance of payment.
(II) It has favourable balance of payment.
Codes:
(A) Both (I) and (II) are correct.
(B) Both (I) and (II) are incorrect.
(C) Only (I) is correct.
(D) Only (II) is correct.
Ans: (C) Only (I) is correct.
56. India is not associated with: [GSET]
(A) SAARC.
(B) NAFTA.
(C) BRICS.
(D) None of the above.
Ans: (B) NAFTA.
57. The IMF derives its finance from: [GSET]
(A) General Resource Account.
(B) Special Disbursement Account.
(C) ESAF Trust.
(D) All of the above.
Ans: (D) All of the above.
58. Domestic currency depreciates when: [GSET]
(A) There is an inflation.
(B) There is deflation.
(C) When domestic inflation is higher than foreign inflation.
(D) When domestic money supply is less.
Ans: (C) When domestic inflation is higher than foreign inflation.
59. The Andean Pact belongs to which level of regional economic integration? [GSET]
(A) Free Trade Area.
(B) Customs Union.
(C) Common Market.
(D) Economic Union.
Ans: (B) Customs Union.
60. Capital Account convertibility will affect: [GSET]
(A) Repatriation of profits by MNC.
(B) Value of India’s exports.
(C) Value of India’s imports.
(D) India’s current account balance.
Ans: (A) Repatriation of profits by MNC.
61. Match the following: [GSET]
|
Part A WTO Ministerial Conferences |
Part B Held in |
|
(w) First. (x) Second. (y) Third. (z) Fourth. |
(1) Geneva. (2) Singapore. (3) Doha, Qatar. (4) Seattle, USA. |
Codes:
(A) (w)-(1), (x)-(2), (y)-(3), (z)-(4).
(B) (w)-(2), (x)-(1), (y)-(4), (z)-(3).
(C) (w)-(4), (x)-(2), (y)-(3), (z)-(1).
(D) (w)-(1), (x)-(2), (y)-(4), (z)-(3).
Ans: (B) (w)-(2), (x)-(1), (y)-(4), (z)-(3).
62. In terms of ‘GDP’ world’s largest free trade area is: [GSET]
(A) NAFTA.
(B) SAARC.
(C) ASEAN.
(D) EU.
Ans: (A) NAFTA.
63. To join IFC, a country _______. [GSET]
(A) Must first be a member of the WB.
(B) Have signed IFC’s AOA.
(C) Have deposited instrument of acceptance of the AOA.
(D) All of the above.
Ans: (D) All of the above.
64. Which one of these is not an original/founder member of “ASEAN”? [GSET]
(A) Indonesia.
(B) Malaysia.
(C) Korea.
(D) Singapore.
Ans: (C) Korea.
65. Product life cycle theory of ‘FDI’ was propounded by _______. [GSET]
(A) Adam Smith.
(B) Raymond Vernon.
(C) F.W. Taussig.
(D) Heckscher-Ohlin.
Ans: (B) Raymond Vernon.
66. Match the following items of List I with the items of List II and choose the correct option from the codes given below it: [GSET]
|
List-I |
List-II |
|
(a) Ethnocentric. (b) Polycentric Approach. (c) Regiocentric Approach. (d) Geocentric Approach. |
(1) Companies view foreign market as an extension of domestic market. (2) Companies establish foreign subsidiary and empowers its executives. (3) Subsidiaries consider regional environment for policy formulation. (4) Companies view the entire world as a single country. |
Codes:
(A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(B) (a)-(2), (b)-(3), (c)-(1), (d)-(4).
(C) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
(D) (a)-(1), (b)-(3), (c)-(2), (d)-(4).
Ans: (A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
67. Match the items of List I with the items of List II and choose the correct option from the codes given below it: [GSET]
|
List-I |
List-II |
|
(a) Importing. (b) Marketing. (c) Sales expansion. (d) Economic forces. |
(1) Mode of International Business. (2) Functions of International Business. (3) Objectives of International Business. (4) External Influence. |
Codes:
(A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).
(B) (a)-(4), (b)-(2), (c)-(3), (d)-(1).
(C) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(D) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
Ans: (C) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
68. The W.T.O. is the embodiment of _______ results and the successor to _______. [GSET]
(A) Uruguay Round, GATT.
(B) Bretton Woods, GATT.
(C) Uruguay Round, GARP.
(D) Bretton Woods, GAAP.
Ans: (A) Uruguay Round, GATT.
69. Which of the following is not a member of NAFTA: [GSET]
(A) USA.
(B) CANADA.
(C) MAXICO.
(D) SPAIN.
Ans: (D) SPAIN.
70. Under the Bretton Woods system the only currency that remained convertible into Gold was: [GSET]
(A) The British Pound.
(B) US Dollar.
(C) Japanese Yes.
(D) Chinese Yuan.
Ans: (B) US Dollar.
71. The Apex body for the Export Promotion of the country is: [GSET]
(A) Indian Institute of Foreign Trade.
(B) Indian Institute of Export Trade.
(C) Indian Institute of Export Promotion.
(D) Federation of Indian Export Organisation.
Ans: (D) Federation of Indian Export Organisation.
72. EXIM banks extend line of credit to the following except: [GSET]
(A) Foreign Government.
(B) Foreign Government Agencies.
(C) Foreign Financial Institution.
(D) Foreign Companies.
Ans: (D) Foreign Companies.
73. To be eligible as MNC a firm should have over its foreign affiliates: [GSET]
(A) ownership only.
(B) control only.
(C) either ownership or control.
(D) neither ownership nor control is needed.
Ans: (C) either ownership or control.
74. The theory of comparative advantage assumes single factor of production i.e.,: [GSET]
(A) Land.
(B) Labour.
(C) Capital.
(D) Machinery.
Ans: (B) Labour.
75. Venture capital fund cannot invest more than _______ (%) of _______ in one venture capital undertaking. [GSET]
(A) 25, corpus of funds.
(B) 75, investible funds.
(C) 25, capital issued.
(D) 50, corpus of funds.
Ans: (A) 25, corpus of funds.
76. The relationship between the general council and dispute settlement body is: [GSET]
(A) Dispute settlement body reports to General council.
(B) Both report to ministerial council.
(C) Both have trade policy review body as the appellate body.
(D) Both are same, functioning differently.
Ans: (D) Both are same, functioning differently.
77. Which is the basic form of innovation? [GSET]
(A) Introduction of novel production process.
(B) Improvement of existing process.
(C) Development of existing firm.
(D) All of the above.
Ans: (D) All of the above.
78. In which year the GATT was formed? [GSET]
(A) 1950.
(B) 1947.
(C) 1970.
(D) 1975.
Ans: (B) 1947.
79. Which one of the following is not the type of “Balance of Payments”? [GSET]
(A) Current A/c.
(B) Capital A/c.
(C) Commodity A/c.
(D) Current and Capital Accounts.
Ans: (C) Commodity A/c.
80. _______ is not the component of International Liquidity. Which one of the following will be used correctly to complete the sentence? [GSET]
(A) Gold held by Central Banks.
(B) Gold held by State Bank of India.
(C) Euros held by RBI.
(D) Canadian Dollars held by RBI.
Ans: (B) Gold held by State Bank of India.
81. Bretton Woods Conference recommended the establishment of: [GSET]
(A) International Euro Fund.
(B) International Bail-out Fund.
(C) International Monetary Fund.
(D) WTO.
Ans: (C) International Monetary Fund.
82. World Trade Organisation was formed in 1994 on the basis of: [GSET]
(A) Tariffs and Safeguards Suggestions.
(B) Dunkel Proposals.
(C) GATT’s Liquidation.
(D) Bretton Woods Proposals.
Ans: (B) Dunkel Proposals.
83. Statement I: EXIM Bank in India was set up in 1982. [GSET]
Statement II: FDI stands for ‘Foreign Direct Investment’.
Statement III: Administering trade agreements is one of the functions of WTO.
Now, on the basis of reading of above statements, select the correct answer from the following four choices.
(A) I, II and III are correct.
(B) I and II are correct and III is false.
(C) Only II and III are correct.
(D) Only I is correct.
Ans: (A) I, II and III are correct.
84. Which of the following is not included in the current account of the balance of payments account? [GSET]
(A) Transactions for exports.
(B) Interest payments.
(C) Remittances made by nationals working abroad.
(D) Long-term loans received by the country from World Bank in foreign currency.
Ans: (D) Long-term loans received by the country from World Bank in foreign currency.
85. The Dunkel draft was responsible for: [GSET]
(A) Liberalizing trade.
(B) Abolition of GATT.
(C) Establishment of WTO.
(D) All of the above.
Ans: (D) All of the above.
86. The difference between Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) is: [GSET]
(A) FDI is in domestic currency and FII in foreign currency.
(B) FDI brings in real foreign capital and FII is speculative.
(C) FII involves production and FDI does not.
(D) None of the above.
Ans: (B) FDI brings in real foreign capital and FII is speculative.
87. The ‘Most Favoured Nation Clause’: [GSET]
(A) Promotes trade discrimination.
(B) Reduces trade discrimination.
(C) Creates trade blocs.
(D) Creates customs unions.
Ans: (B) Reduces trade discrimination.
88. Country’s balance sheet is called: [GSET]
(A) Balance of payment.
(B) Terms of trade.
(C) Trade ratios.
(D) Direction of trade.
Ans: (A) Balance of payment.
89. Which of the following is referred to as a predecessor to WTO? [GSET]
(A) GATT.
(B) IMF.
(C) OPEC.
(D) World Bank.
Ans: (A) GATT.
90. Which of the following types of FDI includes creation of new assets and production facilities in the host country? [GSET]
(A) Strategic Alliance.
(B) Brownfield Investment.
(C) Merger and Acquisition.
(D) Greenfield Investment.
Ans: (D) Greenfield Investment.
91. GATT stands for: [GSET]
(A) Government Aided Tariff Treaty.
(B) General Agreement on Trade and Tariff.
(C) Generally Accepted Trade Tariff.
(D) Government Agreed Tariff on Trade.
Ans: (B) General Agreement on Trade and Tariff.
92. The quota that restricted on world trade in textile was known as: [GSET]
(A) TRIPS.
(B) MFA.
(C) GATT.
(D) TRIMS.
Ans: (B) MFA.
93. The WTO is the successor to the [GSET]
(A) GATT.
(B) ASEAN.
(C) EU.
(D) UNCTAD.
Ans: (A) GATT.
94. Which among the following is closely associated with intellectual property rights? [GSET]
(A) GATS.
(B) TRIMS.
(C) TRIPs.
(D) MFN.
Ans: (C) TRIPs.
95. TRIPS came into force in [GSET]
(A) 1995.
(B) 1996.
(C) 1997.
(D) 1998.
Ans: (A) 1995.
96. Geometric firm is a MNC that maintains a balance between: [GSET]
(A) Home market and local market oriented policies.
(B) Domestic market and regional market-oriented policies.
(C) Home market and host market-oriented policies.
(D) Local market, domestic market and regional market-oriented policies.
Ans: (C) Home market and host market-oriented policies.
97. What is Euro-IV? [GSET]
(A) European Currency.
(B) British Currency.
(C) European Football Festival.
(D) Pollution Control Norms.
Ans: (D) Pollution Control Norms.
98. Sectoral disequilibrium: [GSET]
(A) is a type of disequilibrium in the balance of payment.
(B) is not a type of disequilibrium in the balance of payment.
(C) is a type of cyclical disequilibrium in the balance of payment.
(D) is a type of structural disequilibrium in the balance of payment.
Ans: (B) is not a type of disequilibrium in the balance of payment.
99. By which act government checks restrictive trade? [GSET]
(A) Industrial Policy Act, 1991.
(B) MRTP Act.
(C) FEMA Act.
(D) None of the above.
Ans: (B) MRTP Act.
100. FEMA signifies: [GSET]
(A) Free Export Management Act.
(B) Foreign Exchange Management Act.
(C) Foreign Exchange Monitoring Act.
(D) Free Export Marketing Act.
Ans: (B) Foreign Exchange Management Act.
101. CSR is: [GSET]
(A) Corporate Security Ratio.
(B) Corporate Statutory Records.
(C) Corporate Social Responsibility.
(D) Corporate Statutory Responsibility.
Ans: (C) Corporate Social Responsibility.
102. The “Soft Loan Window” of World Bank is: [GSET]
(A) International Monetary Fund.
(B) International Finance Corporation.
(C) International Development Agency.
(D) Asian Development Bank.
Ans: (B) International Finance Corporation.
103. International Bank for Reconstruction and Development is: [GSET]
(A) Exim Bank.
(B) IMF.
(C) World Bank.
(D) Ministry of Corporate Affairs.
Ans: (C) World Bank.
104. Which of the following is not the agency of World Bank? [GSET]
(A) MIGA.
(B) ADB.
(C) ICSID.
(D) IDA.
Ans: (B) ADB.
105. IMF was formed in: [GSET]
(A) 1945.
(B) 1946.
(C) 1947.
(D) 1948.
Ans: (A) 1945.
106. The quotas of all the member countries with the IMF are valued in terms of: [GSET]
(A) GDR.
(B) SDR.
(C) ADR.
(D) ODR.
Ans: (B) SDR.
107. The IMF was established in the year [GSET]
(A) 1944.
(B) 1946.
(C) 1955.
(D) 1956.
Ans: (A) 1944.
108. Which of the following countries is a member of ASEAN? [GSET]
(A) Indonesia.
(B) Japan.
(C) United States.
(D) India.
Ans: (A) Indonesia.
109. Which of the following sectors is not open for 100% foreign direct investment? [GSET]
(A) Coal.
(B) Oil refining.
(C) PowerPoint.
(D) Airport development.
Ans: (B) Oil refining.
110. _______ is the world’s largest single markets with 27 member countries, a common currency and millions of consumers. [GSET]
(A) NAFTA.
(B) APEC.
(C) EU.
(D) ASEAN.
Ans: (C) EU.
111. Expansion of International Business leads to: [GSET]
(A) Reduction in risk.
(B) Expansion of market.
(C) Optimum utilization of world resources.
(D) All of the above.
Ans: (D) All of the above.
112. International liquidity is composed of: [GSET]
(A) Foreign currency reserves and gold reserves.
(B) Gold held by public.
(C) Gold and foreign currency with banks.
(D) Foreign currency with public.
Ans: (A) Foreign currency reserves and gold reserves.
113. One of the objectives of the International Monetary Fund is: [GSET]
(A) To encourage devaluation of currencies.
(B) To encourage up valuation of currencies.
(C) To discourage competitive devaluation of currencies.
(D) none of the above.
Ans: (C) To discourage competitive devaluation of currencies.
114. Dumping in the international markets means: [GSET]
(A) Selling in Bulk.
(B) Selling at a high price.
(C) Selling in bulk below cost price or domestic price.
(D) Selling all over the world.
Ans: (C) Selling in bulk below cost price or domestic price.
115. Regulation of foreign trade is an indicator of: [GSET]
(A) Inward looking policy.
(B) Encouragement of trade.
(C) Discouraging domestic production.
(D) Imposing taxes on domestic production.
Ans: (A) Inward looking policy.
116. What risk should a firm dealing in international business protect itself from: [GSET]
(A) Risk of Life.
(B) Political Risk.
(C) Risk of Earthquake.
(D) Risk of Injury.
Ans: (B) Political Risk.
117. Intellectual Property Rights: [GSET]
(A) Are licensed through patents.
(B) Are related to non-physical products.
(C) Are related to technology.
(D) All of the above.
Ans: (D) All of the above.
118. UNCTAD was established in: [GSET]
(A) New York in 1964.
(B) Geneva in 1964.
(C) Washington DC in 1947.
(D) Geneva in 1958.
Ans: (B) Geneva in 1964.
119. NAFTA is a free trade zone comprising of which of the following countries? [GSET]
(A) Canada, Mexico and South America.
(B) Canada, Mexico and Peru.
(C) Mexico, South America and the United States.
(D) Canada, Mexico and the United States.
Ans: (D) Canada, Mexico and the United States.
120. Which of the following would be the best illustration of a subculture? [GSET]
(A) A religion.
(B) A group of close friends.
(C) Your University.
(D) Your Occupation.
Ans: (A) A religion.
121. Privatisation of ownership through sale of equity share is called: [GSET]
(A) Merger.
(B) Disinvestment.
(C) Contracting.
(D) None of the above.
Ans: (B) Disinvestment.
122. Which one is not an element of internal environment? [GSET]
(A) Marketing capabilities.
(B) Operational capabilities.
(C) Money and capital capabilities.
(D) Personal capabilities.
Ans: (C) Money and capital capabilities.
123. Ratio of a country’s export prices to its import prices is called: [GSET]
(A) Relative Price Ratio.
(B) Trade Ratio.
(C) Terms of Trade.
(D) Benefit Ratio.
Ans: (C) Terms of Trade.
124. Which of the following is true about direct investment as a mode of international expansion? [GSET]
(A) It allows a firm to retain full control over its investment.
(B) It yields the lower returns than joint ventures.
(C) It involves the least amount of risk.
(D) It involves the least cost.
Ans: (A) It allows a firm to retain full control over its investment.
125. International trade theory which provides that capital intensive country should export labour intensive goods and import capital goods is referred to as: [GSET]
(A) Mercantilism theory.
(B) Leontief Paradox.
(C) Heckscher-Ohlin Theory.
(D) Theory of Comparative Advantage.
Ans: (B) Leontief Paradox.
126. Regional economic integration is defined as the creation of trading agreements between _______. [GSET]
(A) Firms targeting the same market.
(B) Individual firms in an industry.
(C) Related industries.
(D) Blocks of countries.
Ans: (D) Blocks of countries.
127. Who authored the book called ‘Gospel of Wealth’? [GSET]
(A) Jhonson and Jhonson.
(B) Milton Friedman.
(C) Andrew Carnegie.
(D) Keith Davis.
Ans: (C) Andrew Carnegie.
128. Which one is a portfolio investment? [GSET]
(A) Joint venture.
(B) Acquisition.
(C) Investments by FIIs (Foreign Institutional Investors).
(D) Wholly owned subsidiary.
Ans: (C) Investments by FIIs (Foreign Institutional Investors).
129. Who wrote the book ‘I’ m Ok-You’re Ok’? [GSET]
(A) Thomas A Harris.
(B) Eric Bervie.
(C) A. Wagner.
(D) Fred Luthans.
Ans: (A) Thomas A Harris.
130. The Diamond model assumes that [GSET]
(A) Multinational firms must develop global strategies based only on home demand conditions.
(B) Multinational firms must pay less attention to global consumers than domestic consumers.
(C) The national home base of a firm must be the biggest market for a multinational firm.
(D) The national home base of a firm plays a key role in shaping that firms competitive advantage in global markets.
Ans: (D) The national home base of a firm plays a key role in shaping that firms competitive advantage in global markets.
131. The Monopolistic Advantage Theory of foreign investment was propounded by [GSET]
(A) Stephen.
(B) Kindleberger.
(C) Hymer.
(D) John Dunning.
Ans: (A) Stephen.
132. As per the Foreign Trade Policy 2015-2020, a three star export house should have: [GSET]
(A) Export performance (FOB/FOR) of US$ 100 million during current and previous two years.
(B) Export performance (FOB/FOR) of US$ 500 million during current and previous two years.
(C) Export performance (FOB/FOR) of US$ 1000 million during current and previous two years.
(D) Export performance (FOB/FOR) of US$ 2000 million during current and previous two years.
Ans: (A) Export performance (FOB/FOR) of US$ 100 million during current and previous two years.
133. The Maastricht Treaty of February 1992 renamed the European Community (EC) as: [GSET]
(A) The European Union (EU).
(B) The European Economic Union (EEU).
(C) The European Economic Community (EEC).
(D) The European Monetary Union (EMU).
Ans: (A) The European Union (EU).
134. Which of the following is one of Hofstede’s four cultural dimensions that differentiate countries? [GSET]
(A) Customer relationship management versus power distance.
(B) Strategic management versus marketing management.
(C) Weak versus strong uncertainty avoidance.
(D) Total quality management versus just in time technique.
Ans: (C) Weak versus strong uncertainty avoidance.
135. Domestic-based export agents perform a valuable service for companies seeking to enter foreign markets. The primary function of these agents is to _______. [GSET]
(A) Carry on exporting activities on behalf of several producers.
(B) Buy the manufacturer’s products and then sell them abroad.
(C) Buy foreign products and sell them in the domestic country.
(D) Seek and negotiate foreign purchase for a commission.
Ans: (D) Seek and negotiate foreign purchase for a commission.
136. In a sprinkler approach to international expansion, _______. [GSET]
(A) Many countries are entered simultaneously.
(B) Countries are entered when competition is limited.
(C) Countries are gradually entered sequentially.
(D) Countries in which the supply of raw material is greatest are entered first.
Ans: (A) Many countries are entered simultaneously.
137. A clean letter of credit guarantees the acceptance and payment of bills without: [GSET]
(A) Approval.
(B) Bank.
(C) Condition.
(D) Loss.
Ans: (C) Condition.
138. Many U.S. firms prefer to sell in Canada, England and Australia rather than in larger markets such as Germany and Frances – because they feel more comfortable with the languages, laws and culture, which reflect the _______ between these countries and the United States. [GSET]
(A) Self-serving bias.
(B) Coincident development.
(C) Psychic proximity.
(D) Cognitive dissonance.
Ans: (C) Psychic proximity.
139. Which of the following is an example of an issue for which an agreement has not been made between two or more countries? [GSET]
(A) Restricting harmful emissions.
(B) Deep-sea mining in non-coastal areas of the oceans.
(C) Preserving endangered species.
(D) Banning the use of certain pesticides.
Ans: (B) Deep-sea mining in non-coastal areas of the oceans.
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