Business Environment and International Business MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7

51.
The theory of reciprocal demand is developed by . . . . . . . .

A. Veron

B. John Stuart Mill

C. Ohlin

D. None of these

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52.
What are the objectives of international trade?

A. Sales expansion

B. Diversification

C. Maximise competitive risk

D. Both A and B

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53.
Favourable investment on private investment in called

A. effect of fiscal policy

B. limits of fiscal policy

C. effect on Public credit policy

D. None of the above

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Answer & Solution

Answer: Option C

Solution:

Option A: effect of fiscal policy
Fiscal policy involves government decisions on taxation and spending. When the government implements tax cuts, subsidies, or increased spending on public infrastructure, it can create a more favorable environment for private investment. This is because businesses may benefit from lower taxes, increased demand from government spending, or improved infrastructure, making it easier and more attractive for them to invest.

Option B: limits of fiscal policy
The limits of fiscal policy refer to the constraints or challenges in implementing effective fiscal measures. This could include limitations like budget deficits, the risk of inflation, or political constraints that may hinder the government's ability to use fiscal policy effectively. While these are important considerations, they are not directly related to the favorable investment environment for private investment.

Option C: effect on Public credit policy
Public credit policy involves government borrowing and managing public debt. The effects of public credit policy are more related to how the government manages its debt levels, interest rates, and overall creditworthiness. This policy impacts the broader economy but is less directly related to encouraging private investment than fiscal policy measures like tax cuts or government spending.

Option D: None of the above
This option suggests that none of the other options correctly describe the factor that influences favorable private investment. However, this is incorrect because Option A accurately describes how fiscal policy can positively influence private investment.

Conclusion:
Option A is the correct answer because it correctly identifies that the effect of fiscal policy is the key factor in creating a favorable environment for private investment. Fiscal policy measures, such as tax incentives and government spending, directly impact the investment decisions of private businesses. Option C relates more to public debt management and is not as directly connected to private investment as fiscal policy is. Therefore, Option A is the most appropriate choice.

54.
Globalisation is beneficial for firms because

A. it opens up new market opportunities

B. it protects them against foreign competition

C. it cushions them from the effects of events in other countries

D. it increases the risk and uncertainty of operating in a globalising world economy

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55.
The main advantage of a system of flexible (floating) exchange rates is that it:

A. provides certainty for international traders.

B. provides automatic correction of balance of payments deficits

C. reduces international transactions costs

D. provides policy discipline for governments

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56.
Which of the following is not included in features of business environment?

A. Business environment includes both types internal and external

B. It is not in control of a businessman

C. Business environment is movable/continuous

D. Activities of business environment are complex in nature

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57.
Which of the following is not a characteristic of bartering internationally?

A. Bartering can be time consuming

B. Bartering can be expensive

C. Bartering is a type of service export and import

D. Bartering can be risky

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58.
Which of the following can not be advantage of licensing?

A. It has low financial risks

B. It avoid tariffs

C. It has possibility of creating future competitor

D. None of the above

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59.
SAARC helps to strength then cooperation with other

A. developed countries

B. developing countries

C. underdeveloped countries

D. None of these

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60.
Which among the following are multinational corporations?
(1) A multinational, decentralized corporation with strong home country presence.
(2) A global, centralized corporation that acquires cost advantage through centralized production when cheaper resources are available.
(3) An international company that builds on the parent corporations technology and research and development.
(4) A transnational enterprise that combines the (1), (2) and (3).

A. 1 and 3

B. 2 and 3

C. 1, 2 and 3

D. 1, 2, 3 and 4

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

51. The theory of reciprocal demand is developed by . . . . . . . .

Answer & Solution

52. What are the objectives of international trade?

Answer & Solution

53. Favourable investment on private investment in called

Answer & Solution

54. Globalisation is beneficial for firms because

Answer & Solution

55. The main advantage of a system of flexible (floating) exchange rates is that it:

Answer & Solution

56. Which of the following is not included in features of business environment?

Answer & Solution

57. Which of the following is not a characteristic of bartering internationally?

Answer & Solution

58. Which of the following can not be advantage of licensing?

Answer & Solution

59. SAARC helps to strength then cooperation with other

Answer & Solution

Answer & Solution

Read More Section(Business Environment and International Business)

51.
The theory of reciprocal demand is developed by . . . . . . . .

52.
What are the objectives of international trade?

53.
Favourable investment on private investment in called

54.
Globalisation is beneficial for firms because

55.
The main advantage of a system of flexible (floating) exchange rates is that it:

56.
Which of the following is not included in features of business environment?

57.
Which of the following is not a characteristic of bartering internationally?

58.
Which of the following can not be advantage of licensing?

59.
SAARC helps to strength then cooperation with other