Business Environment and International Business MCQ Questions and Solutions with Explanations

1

Select the correct option of the following statements being correct or incorrect.
Statement (I): International liquidity encompasses the international reserves only.
Statement (II): International liquidity covers only official holdings of gold, foreign exchange, SDRs and reserve position in the IMF available for the settlement of the international transactions.

A) Both the statements are correct B) Both the statements are incorrect C) Statement (I) is correct while Statement (II) is incorrect D) Statement (I) is incorrect while Statement (II) is correct

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Answer & Solution

Answer: Option D

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2

Foreign Exchange and foreign currencies in India are governed by:

A) SCRA Act B) Banking Regulation Act C) FEMA Act D) SEBI Act

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Answer & Solution

Answer: Option C

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3

Match the items of List-I with those in List-II and select the correct answer.

List-I	List-II
a. Bank Rate Policy	1. Involving the shortening of the currency of bills eligible for rediscount.
b. Credit Rationing	2. Involving the purchase and sale of securities in the open market.
c. Variable Reserve System	3. Involving the alteration of discount rate.
d. Open Market Operations	4. Involving the Variation of the minimum reserve.

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

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Answer & Solution

Answer: Option D

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4

Relaxing the restrictions and controls imposed on business and industry means

A) Liberalization B) Privatization C) Globalization D) None of these

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Answer & Solution

Answer: Option A

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5

If the price elasticity of demand for exports is zero, then exports in local currency will

A) Be the same after devaluation B) Fall after devaluation C) Substantially increase after devaluation D) Partially increase after devaluation

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Answer & Solution

Answer: Option A

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6

Which of the following statements is/are incorrect?

A) Listing receipts and payments in international transaction for a country is called balance of trade B) In the balance of payment, gifts from foreigners is unrequited receipts C) Both A and B D) None of the above

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Answer & Solution

Answer: Option A

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7

Which of the following two schemes were introduced under the new foreign trade policy, 2015-2020?

A) Merchandise Export from India Scheme and Services Export from India Scheme B) Services Export from India Scheme and Services Import from India Scheme C) Services Import from India Scheme and Merchandise Export from India Scheme D) Merchandise Import from India Scheme and Services Export from India Scheme

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Answer & Solution

Answer: Option A

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8

Who is the fiscal agent and advisor to Government in monetary and financial matters?

A) NABARD B) SBI C) RBI D) None of the above

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Answer & Solution

Answer: Option C

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9

Match the following.

List-I (Organisations)	List-II (Features)
a. SAARC	1. It creates procedures for the resolution of trade disputes
b. ASEAN	2. It is dedicated to economic, technological, social and cultural development
c. NAFTA	3. Non-interference in the internal affairs of one another

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

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Answer & Solution

Answer: Option D

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10

The term "hot money" is used to refer to

A) Currency + reserves with the RBI B) Net GDR receipts C) Net foreign direct investment D) Foreign portfolio investment

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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