Business Environment and International Business MCQ Questions and Solutions with Explanations

71

Match the items of List I with the items of List-II and choose the correct answer:

List-I	List-II
a. Direct investment overseas aimed at manufacturing products not manufactured by the firm in the home country	1. Inward FDI
b. Direct investment in a foreign country aimed to sell the output of the firm's domestic production	2. Backward Vertica FDI
c. Direct investment overseas aimed at providing inputs for the firms production process in the home country	3. Conglomerate FDI
d. Foreign firms investing overseas and taking control over foreign assets	4. Forward Vertical FDI

A) a-4, b-3, c-2, d-1 B) a-1, b-4, c-2, d-3 C) a-3, b-4, c-2, d-1 D) a-3, b-2, c-1, d-4

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Answer & Solution

Answer: Option C

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72

Assertion (A): Comparative cost theory is static in character.
Reason (R): Comparative cost theory is based on fixed supplies of factors of production

A) (A) is correct, but (R) is incorrect B) (R) is correct, but (A) is incorrect C) Both (A) and (R) are correct, but (R) is not the correct explanation of (A) D) Both (A) and (R) are correct and (R) is the correct explanation of (A)

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Answer & Solution

Answer: Option D

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73

Globalization is a term used to describe the process of removal of restrictions on which of the following?

A) Foreign Trade B) Foreign Direct Investment C) Flowof factors of production D) All of the above

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Answer & Solution

Answer: Option D

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74

Strategies and policies

A) Are not closely related B) Given direction C) Are the framework for performance appraisal D) Both A and B

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Answer & Solution

Answer: Option B

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75

The balance of payments of a country on Current Account is equal to:

A) Balance of trade plus short-term capital flows B) Balance of trade plus net invisible exports C) Balance of payments minus capital flows D) Balance of invisible trade plus imports

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Answer & Solution

Answer: Option B

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76

Assertion (A): Amended Patent Act, in compliance with WTO, provides for grant of product patent as well as a process patent for a period of 20 years from the date of application.
Reason (R): Under the Act, patent may be granted to an invention which means a new product or process involving an inventive step and capable of industrial application, a technical advance over existing knowledge.

A) Both A and R are true, but R is not the correct explanation of A B) A is false, but R is true C) Both A and R are true and R is the correct explanation of A D) A is true, but R is false

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Answer & Solution

Answer: Option D

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77

Assertion (A): Operating style of the international business can be spread to the entire globe.
Reason (R): The style is limited to the internal economy only.

A) Both (A) and (R) are true and (R) is the correct explanation of (A) B) Both (A) and (R) are true and (R) is not the correct explanation of (A) C) (A) is true, but (R) is false D) (A) is false, but (R) is true

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Answer & Solution

Answer: Option B

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78

The forces that lend momentum to the process of globalisation have been identified by Michael Porter include the following
1. Fluid global capital market
2. Technological restructuring
3. Decreasing religious command
4. Ethnic decontrol
5. New global competitors
6. End of the cold war in 1990s

A) 6, 5, 4 and 3 B) 6, 3, 2 and 1 C) 6, 4, 2 and 1 D) 4, 3, 2 and 1

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Answer & Solution

Answer: Option C

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79

Match List-I with List-II and select the correct answer:

List I	List II
a. Accommodating capital flow	1. Creation of international reserve assets by the IMF and their allocation among member countries in order to improve international liquidity
b. Autonomous capital flow	2. Estimate of foreign exchange flow on account of either variations in the collection of related figures or unrecorded illegal transactions of foreign exchange
c. SDR Allocation	3. Inflow of foreign exchange to meet the balance of payments deficit, normally from the IMF
d. Statistical discrepancy	4. Flow of loans/investments in normal course of business.

A) a-1, b-2, c-4, d-3 B) a-3, b-4, c-1, d-2 C) a-3, b-4, c-2, d-1 D) a-3, b-1, c-2, d-4

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Answer & Solution

Answer: Option B

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80

From the following modes of international business, identify the mode which involves strategic alliance.

A) Franchising B) Leasing C) Turnkey project D) Joint venture

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Answer & Solution

Answer: Option D

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Business Environment and International Business MCQ Questions and Solutions with Explanations | Commerce