MGN578

INTERNATIONAL BUSINESS
 UNIT I

OVERVIEW OF INTERNATIONAL BUSINESS ENVIRONMENT

LEARNING OUTCOMES

• Introduction to international business

• Types of international business
• Globalization and society
• Social and cultural environment
• Political and legal environment
• Economic environment
• Technological environment

INTRODUCTION TO INTERNATIONAL BUSINESS

International business is defined as organization that buys and or sells goods and services across
two or more national boundaries, even if management is located in a single country. At the other
end of the spectrum, international business is equated only with those big enterprises, which have
operating units outside their own country.
International business consists of all commercial transactions—including sales, investments, and
transportation—that take place between two or more countries
Increasingly foreign countries are a source of both production and sales for domestic companies

TYPES OF INTERNATIONAL BUSINESS

Companies may operate in different countries in four primary ways

• Through trade
• Investment
• Strategic alliances
• Licensing

GLOBALIZATION AND SOCIETY

GLOBALIZATION
Globalization can be defined as a process of making something worldwide in its scope or
application. It includes a set of process which leads to the integration of economic, cultural,
political and social system across geographic boundaries. The main aim of globalization is to make
product or service successful in many countries without any modification.

APPROACHES TO GLOBALIZATION
 GLOBALIST APPROACH STAGES OF GLOBALIZATION

Stage one
• No much support to globalization
• Actual leaders of this stage were visionaries.
• There were problems like political hurdles, regulation of policies etc.
Stage two
• Industry started favoring industrialization.
• There were many alliances and mergers

Stage three:
Even small organizations started supporting.
• Massive contribution by airline industry.
Stage four:
• High contribution leads to many consultancy forces.

SCEPTIC APPROACH OF GLOBALIZATION:

Argue globalization is not new
Just an Extension of industrialization and regionalization,
No participation of developing countries
Argues globalization is not new is still evolving and damaging the economy

TRANSFORMATION APPROACH
It says globalization represents an acceptable level of global connection.
The powers of government are reconstructed according to globalization strategies.
Will lead to fragmentation and integration

ANTI GLOBALIST APPROACH

It results in negative outputs. This is because Inequalities between the nations have increased
following globalization and the organizations, like IMF(international monetary funds and World
Bank work with coordination only in elite class, especially in developed countries.

REASON FOR INTERNATIONALIZATION OF BUSINESS

The American Marketing Association (AMA) generalized the definitions of "International
Marketing as a multinational activity concerning implementing the construct, pricing, promotion
and allotment of thoughts, products and services so as to attain business objectives”. The direct
motive of enterprises to operate their business internationally is to expand overseas markets,
seeking new customers for their products and services. As the present market is tend to be
saturated, companies feel need to bring their commodities into broader markets. Only in this way
can they develop their businesses further and survive the fierce competition in business world. The
development of productivity requests firms to internationalize. Over the past decades, the world
trade system has been gradually established and completed, setting in motion the process of
economic globalization. The economic developmental level and science & technology being
 improved, the marketing division and expansion should be deepened. Therefore, the conversion
from domestic market division into cross-national division is enhanced. For the purpose of
promoting trade, multinationals need to organize their manufacture and marketing across different
countries through worldwide resources allocation

ECONOMIC ENVIRONMENT
Economic conditions, economic policies and the economic system are the important external
factors that constitute the economic environment of a business. The economic conditions of a
country-for example, the nature of the economy, the stage of development of the economy,
economic resources, and the level of income, the distribution of income and assets, etc- are among
the very important determinants of business strategies.
Levels of economic development
Low income countries: These are also known as pre industrial countries. These constitute limited
markets for all products and are not significant location for competitive threats. Ex : Afghanistan,
Albania, Algeria, Nepal
Lower middle income countries: Lower middle income countries: These countries are the early
stages of industrialization. Where factories supply a growing domestic market .These countries are
also called developing countries. Ex : Egypt, Argentina, Morocco
Upper middle income countries: These are also called industrializing countries. The percentage
of population engaged in agriculture drops drastically. ex Malaysia is rapidly industrializing.
High income countries: These are known as advanced, industrialized, post industrial or first world
countries.

3 types of economic environment:

• Capitalist
• Socialist
• Mixed.
FACTORS EFFECTING ECONOMIC ENVIRONMENT

• The relationship between parent and home company.

• Extent of competition
• Growth rates and living standards
• Tax regimes, import control etc..

POLITICAL ENVIRONMENT
The political environment of each country is unique. It consist of the factors that are the most
important in selecting the market and formulating the business strategy and includes the regulation,
the government environment that encompasses the business and economic policies, the nature and
constitution of the government system and the policies and characteristics of political parties.
There are a lot of variations in the nature of political system and political climate. That should be
taken care of while investing.
Political risks: political risks can be categorized into micro political risk and the macro political
 risk.
Macro political risk affect all foreign firms operating in the country to an equal extent. EX:
imposition of exchange control, special taxes etc.
Micro political risk conversely apply special restriction to a particular company, industry or
project.

LEGAL ENVIRONMENT
When two nations differ in their laws it’s advisable to specify in advance in a mutual contract the
various laws that might be applicable. Some countries have a law completely based on the court.
But some countries have laws which can be interpreted differently
• Common law: Common law approaches apply to English speaking countries and rely on historical
precedent, judgments in specific cases and ad hoc legislations to create and interpret statues.
• Civil code: countries with civil codes have written rules intended to cover all eventualities so that
the law on a particular issue can be looked upon in the appropriate article of the country’s civil
code. Mostly in European
• Islamic law: it is based on the teachings of Quran. Islamic countries to accept only low interest
rates or even put ban on it in some cases. The primary tenet is of this law is to please god.
• Socialist law: The legal system is premised on the government being always right. (Russia)
Conflict of laws
• In Britain the period for most classes of contract is six years in France it can be up to thirty years.
• The meaning of consideration varies between countries. (price of goods and wages for employees)
• Some countries illegal will not be illegal in other countries
• Some countries especially in European draw important distinctions in commercial and non
commercial contract and keep different court.
Rules covering the transport of goods
• The Hague Visby Rules cover carriage by sea and are incorporated into the domestic laws of
majority of the worlds trading nations. The Hague rules was drafted in 1921 and subsequently
extended via 1968 Brussels protocol.
• Air transport is covered by Warsaw convention 1929 which sets maximum limit of liability for
negligence and regulate the legal carrier relationship between air carriers and consignees.

TECHNOLOGICAL ENVIRONMENT
Technological environment refers to innovate techniques and methods which help generate new
products and market opportunities. Firms have to keep themselves updated about new technologies
in the market so as to keep abreast of competition as you are aware, technology has a huge impact
on lifestyle, demand and consumption pattern and the economy as a whole.
• There has been massive growth in the business due to technological environment.
• Invent of microprocessors, internet have paved way for tremendous growth.
• Online globalization on the other hand has also tremendously helped in the process of business
growth.
• B to B transactions has been positively affected as business to business relations can be
coordinated upon.
• B to c has also been improved as consumers are now able to use foreign branded commodities.
• Facilities like e learning etc have contributed towards rapid growth.
• Satellite imaging is the next big contribution to have happened.
Recent advances in various technologies
• Microprocessors and telecommunication
• The internet and world wide web
• Online globalization:
• Help domestic companies to transact with foreign companies and set a deal.
• Satellite imaging:
• Improvements in transportation and communication technologies

CULTURAL ENVIRONMENT
Culture is a commonly used term. It comprises a varied collection of interrelated beliefs and
practices followed by a nation’s citizen.
Edward Taylor has provide a classic definition he defined culture ‘That complex whole which
includes knowledge , belief, art, morals, law, custom, and any other capabilities and habits
acquired by individuals as a member of society.
Elements of culture:
• Religion
• Language
• Social culture
• Social values.
Hofstede’s Dimensions of culture
• Individualism VS collectivism : are the consequences of the culture and affect the formation of
groups, productivity and marketing practice
• Power distance: The distance at work place
• Masculine vs feminine values: Japan is considered to be strongly masculine. The Netherlands
occupies the other end of spectrum. The US occupies the middle position.

NATURAL AND DEMOGRAPHIC ENVIRONMENT

International business are affected by the kind of terrain, soil, and sub soil characteristic of the area
where they function. In a rocky region roses cannot be grown. but granite industry can be
developed and a hilly region rice cant be developed but coffee or tea can.

OPPORTUNITIES AND THREATS FOR INDIAN COMPANIES IN GLOBAL

MARKET
Obstacles To Globalization Of Indian Companies

• There is a great deal of complexity in government policies and procedures

• certain political changes create problems in adopting modern technologies
• an Indian product is seen as a poor quality products in the international market
• small firm have lack of experience in the international business
• there are limited research and development technologies
• there are tough companies among domestic countries
 UNIT II

TRADE AND INVESTMENT THEORIES

LEARNING OUTCOMES

• Recent world trade and investment patterns

• Theory of absolute advantage
• Theory of comparative advantage
• The diamond model of national competitive advantage
• Factor mobility theory
• Governmental influence on trade and investments

RECENT WORLD TRADE AND INVESTMENT PATTERNS

European Free Trade Association (EFTA), agricultural policy, World Trade Organization
(WTO), agriculture, climate change, Doha Round, exports, financial crisis, food security, free
trade agreement (FTA), industrial goods, intellectual property rights, international
cooperation, livelihood security, subsidies, tariffs, trade

TRADE PATTERN THEORIES

International trade theories are simply different theories to explain international trade. Trade
is the concept of exchanging goods and services between two people or entities.
International trade is then the concept of this exchange between people or entities in two
different countries.

THEORY OF ABSOLUTE ADVANTAGE

Principle of Absolute Advantage

According to this principle, a country should export a commodity that can be used at a lower cost
than can other nations. Conversely, it should import commodity that can only be produced at a
higher cost than can other nations.

Principle of Relative Advantage

One problem with the principle of absolute advantage is that it fails to explain whether trade will
take place if one nation has absolute advantage for all products under consideration

THEORY OF COMPARATIVE ADVANTAGE

According to Ricardo’s Principle of Relative (or Comparative) Advantage, a country may be better
than another countries in producing many products but should only produce what it produces the
best. Essentially it should either concentrate on a product with the greatest comparative advantage
or a product with the least comparative disadvantage. David Ricardo developed the important
concept of comparative advantage in considering a nation’s relative production efficiencies as they
apply to international trade. In Ricardo’s view, the exporting country should look at the relative
efficiencies of production for both commodities and make only those goods it could produce most
efficiently

THE DIAMOND MODEL OF NATIONAL COMPETITIVE ADVANTAGE

Porter’s Diamond Model has been the exemplary work of Michael Porter, who first published
about this economic model in his book, “The Competitive Advantage of Nations” (1990). This
simple but effective model aims at explaining the cause behind the reason as to why one nation
tends to be more competitive than other nations in relation to a particular industry. This book
also tries to look into the matter of innovations in businesses that may be more conducive to one
nation and might not be possible in others.

Porter’s Diamond Model, also known as the Theory of National Advantage, is used by different
economic institutions to calculate the external competitive environment. This analysis helps in
giving us an understanding of the relative strength of one business than the other. On analyzing
the external environment, the causes for industrial advantages for some businesses in a particular
place or region can also be deciphered.

FACTOR MOBILITY THEORY

Factor mobility refers to the ability to move factors of production -labor, capital or land - out
of one production process into another. Factor mobility may involve the movement of
factors between firms within an industry, as when one steel plant closes but sells its
production equipment to another steel firm. Mobility may involve the movement of
factors across industries within a country, as when a worker leaves employment at a textile firm
and begins work at an automobile factory. Finally mobility may involve the movement of
factors between countries either within industries or across industries, as when a farm worker
migrates to another country or when a factory is moved abroad.
GOVERNMENTAL INFLUENCE ON TRADE AND INVESTMENTS

Why does government impose trade barriers?

• For protecting domestic companies from foreign competition
• Encouraging domestic production
• Increasing revenue for the government
• Promoting indigenous research and development
• Conserving the foreign exchange resources of the country
• Making balance of payment position favorable
• Discriminating against certain countries
• Protecting local employees.
• There also involves a combination of domestic as well as foreign policy measures
being adopted upon.
• The domestic policy measures are adopted for:
• Increasing citizens overall quality of life
• Engage in nations development
• Achieving full literacy
 UNIT III

ROLE OF INTERNATIONAL ORGANIZATIONS AND

INTERNATIONALIZATION OF FIRMS

LEARNING OUTCOMES

• Cross national cooperation and agreements

• Tariff and non-tariff barriers
• WTO
• Regional blocks

CROSS NATIONAL COOPERATION AND AGREEMENTS

The major reason is to establish regional trade groups is to increase market size. There are two
major ways of regional economic integration from the stand point of tariffs:
• FREE TRADE AGREEMENTS: economic blocs in which all barriers to trade, i.e., tariff and
nontariff barriers, are abolished amongst member nations, but each member determines its own
external trade barriers beyond the block
• CUSTOMS UNIONS: economic blocs in which all barriers to trade, i.e., tariff and nontariff
barriers, are abolished amongst member nations, and common external barriers are levied against
non-member countries A more extensive type of regional trade agreement :
• COMMON MARKET: beyond tariff and non-tariff barriers countries can enhance their
cooperation by permitting the free flow of capital and labor

TARIFF AND NON-TARIFF BARRIERS

TARIFF BARRIERS
• Tariff based on purpose:
Revenue tarrif: Imposed for purpose of generating tax revenues for government
and may be placed on either exports or imports. They are created for increasing
government revenue without imposing restrictions on any industry.
• Protective tarrifs: It involves charging high tariff rates on certain commodities for
protecting the indigenous markets. They are planned for creating an insulation on
import competition.
• Tariff based on assessment:
• Specific tarrif: Are assessed on some basic units of measurement. Such as per unit,per
litre etc.
• Advalorem tarrif: according to value. It turns out to be certain proportion of value of
the commodity.
• Compound tarrif: combination of both specific and the advalorem tariff.
 NON TARRIF BARRIERS:
• Includes a combination of methods like the quota system
• Import licensing
• Quota :a method where by the limit of export or import is decided upon.
• Foreign exchange regulation: where the government regulates up on the release
of foreign currencies for the various imports being made.
• Product standard and technical regulation: Controls regarding quality of products and
certain specifications.
• Voluntary export restraint: A mutual method of development being adopted up on
by both the importing and exporting firms.

WTO

World Trade Organization (WTO): a permanent body founded in 1995 to (i) facilitate the
development of a free and open international trading system according to the GATT and (ii)
adjudicate trade disputes between or amongst member nations included trade in services,
investment, intellectual property, agriculture, textiles continued with the MFN clause that
prohibits any sort of trade discrimination Exceptions: ◦ preferential treatment for products of
emerging economies ◦ Barriers can be raised against countries that indulge in unfair trade
practices ◦ concessions maybe granted to members of an economic bloc dispute resolution: a
clearly defined mechanism for the settlement of dispute Doha round focused on giving a boost
to developing nations - attempts to solve the problem of lowering tariffs on industrial goods in
return for a reduction of agricultural barriers (india) were not successful

REGIONAL BLOCKS

The effects of regional economic integration can be economic, cultural, and/or political in nature.
Regional (as opposed to global) economic integration occurs because of the greater ease of
promoting cooperation on a smaller scale. Member states must determine the degree of national
sovereignty they are willing to surrender in order to capture the benefits of economic integration.
A common market goes further than free trade areas and customs unions by permitting the free
flow of capital and labor and possibly harmonizing commercial, monetary, and fiscal policies
and establishing a common currency plus a supranational political structure dedicated to dealing
with common economic issues. Commodity agreements exist to help developing countries
stabilize prices, supplies, and hence their export earnings.
 UNIT IV

INTERNATIONAL FINANCIAL MARKET

LEARNING OUTCOME

• Foreign market mechanism

• Exchange rate agreement
• Determinants of exchange rate.

INTERNATIONAL FINANCIAL MARKET

The International Financial Market is the place where financial wealth is traded between
individuals (and between countries). It can be seen as a wide set of rules and institutions where
assets are traded between agents in surplus and agents in deficit and where institutions lay down
the rules.

FOREIGN MARKET MECHANISM

The foreign exchange market is the mechanism by which a person of firm transfers purchasing
power form one country to another, obtains or provides credit for international trade transactions,
and minimizes exposure to foreign exchange risk.

The international business context requires trading and investing in assets denominated in different
currencies. Foreign assets and liabilities add a new dimension to the risk profile of a firm or an
investor's portfolio: foreign exchange risk. This chapter has two goals. First, this chapter introduces
the terminology used in foreign exchange markets. Second, this chapter presents the instruments
used in currency markets.

The modern foreign exchange market began forming during the 1970s. This followed three
decades of government restrictions on foreign exchange transactions under the Bretton Woods
system of monetary management, which set out the rules for commercial and financial relations
among the world's major industrial states after World War II. Countries gradually switched
to floating exchange rates from the previous exchange rate regime, which remained fixed per the
Bretton Woods.

The foreign exchange market is unique because of the following characteristics:

• its huge trading volume, representing the largest asset class in the world leading to
high liquidity;
• its geographical dispersion;
• its continuous operation: 24 hours a day except for weekends, i.e., trading from
22:00 GMT on Sunday (Sydney) until 22:00 GMT Friday (New York);
• the variety of factors that affect exchange rates
EXCHANGE RATE AGREEMENT
Exchange rate is the price of one currency in terms of another currency. Exchange rates can be
either fixed or floating. But if the market price falls below the fair-trade price, the producer must
be paid at least a price equal to the fair-trade price.

Exchange Rate Agreement means, for any Person, any foreign exchange contract, currency swap
agreement or other similar agreement as to which such Person is a party or a beneficiary,
designed to provide protection against fluctuations in currency exchange rates, incurred in the
ordinary course of business.

A foreign exchange derivative based upon the difference between two forward exchange rates.
This could be the difference between the projected currency exchange rates within3month and 6
month contracts. Unlike other forward exchange agreements, the spot rate does
not directly factor into the value.

A way of measuring the relative value of a currency by comparing it to a basket of other

currencies. The exchange rate index value is calculated by comparing the primary currency to
the average value of other currencies, weighted according to the overall amount of trade with all
currency trade. exchange rate regime in which the rate is allowed to be determined in
the exchange market without an announced par value as the goal of intervention, but the
authorities do nonetheless intervene at their discretion.

DETERMINANTS OF EXCHANGE RATE:

Before we look at these forces, we should sketch out how exchange rate movements affect a
nation’s trading relationships with other nations. A higher currency makes a country’s exports
more expensive and imports cheaper in foreign markets; a lower currency makes a country’s
exports cheaper and its imports more expensive in foreign markets. A higher exchange rate can
be expected to lower the country’s balance of trade, while a lower exchange rate would increase
it.

INFLATION
• Interest rates
• Speculation
• Change in competences
• Balance of payment
• Govt.debt
 UNIT V

INTERNATIONAL EXPANSION STRATEGY

LEARNING OUTCOME
• Export and import strategy
• Types of collaborative agreements
• Direct investment

INTERNATIONAL EXPANSION STRATEGY

International expansion strategies are formal, multi-level strategic plans that businesses use to
enter an overseas market, establish a growing presence, and become quickly profitable. Foreign
expansion strategies make growth more structured and sustainable. When composed properly,
these plans mitigate expansion risk and encourage efficient use of resources, timelines, and capital
for global expansion.

One thing company often fail to do is adequately articulate what is behind an international
expansion strategy. Growth for its own sake can be dangerous. Knowing why is essential, because
it will drive decision-making and help you to better measure your success. Here are some common
reasons for expansion

• To find new talent

• To expand the sales
• To diversify market place
• Unique circumstance
• Time

EXPORT AND IMPORT STRATEGY:

Exports result in receipts and imports result in payments. Although export and import activities
are a natural extension of distribution strategy, they also include elements of product, promotion
and pricing factors and decisions.
Exporting is defined as the sale of products and services in foreign countries that are sourced or
made in the home country. Importing is the flipside of exporting. Importing refers to buying
goods and services from foreign sources and bringing them back into the home country.
Importing is also known as global sourcing.

MAJOR ELEMENTS:

• Product
• Customer
 • Competition
• Regulatory

TYPES OF COLLABORATIVE AGREEMENT:

• Joint Venture Agreement.
• Collaboration Agreement.
• Partnership Agreement.
• Limited Partnership Agreement.
• Strategic Alliance Agreement.
• Co-Marketing Agreement.
• Non-Disclosure Agreement.
• Merger Agreement.

DIRECT INVESTMENTS

A direct investment is often referred to as foreign direct investment, or FDI. Investors put money
into a business operating in another country. They aim to get a strong voice in the management
of the enterprise and a long-term presence in a foreign country. Foreign direct investment may be
performed either organically, by expanding the operations of an existing business into a foreign
country or inorganically by buying a business in the target country.

Direct investment can take any of the following forms:

• Company acquisition
• Join ventures
• Whole ownership
• Partnership
• Mergers
• Share acquisition.
 UNIT VI

GLOBALISATION AND INTERNATIONAL TRADE

LEARNING OUTCOME
• Country evaluation and selection
• Issue in asset protection
• Globalisation with social responsibility
• World economic growth and environment

GLOBALISATION AND INTERNATIONAL TRADE

International trade has an important share in GDP in different countries. Various companies from
different countries are looking for new growth opportunities beyond their home country borders.
Due to international trade, important sectors of the economies can be stimulated, such as
transport and ICT sectors. Thus, international trade can be important for business, due to profits
growth prospects, reduced dependence on known markets, business expansion, etc. The increase
of international trade over the years has been a result of the globalization process. Thus, both
consumers and companies can now choose from a wider range of products and services. Also,
globalization refers to the interdependence between countries arising from the integration of
different aspects of the economy, such as trade. International trade can stimulate economic
growth of countries that are now so interconnected. Currently, globalization cannot be ignored
by businesses, due to the opportunities offered by foreign markets.

Globalization refers to the growing interdependence of countries resulting from the increasing
integration of trade, finance, people, and ideas in one global marketplace. International trade and
cross-border investment flows are the main elements of this global integration. Trade freedom is
the best economic strategy for all of the world’s peoples. No single nation has the natural
resources, infrastructure, and human capital in sufficient quantity and quality to realize the
standard of living to which developed nations have become accustomed and to which developing
nations aspire.

So, we tradethe major economic benefits of free trade derive from the differences among trading
partners, which allow any country a chance to compete in the global market according to its
fundamental economic strengths. Low wage costs, access to cheap capital, a highly skilled
workforce, and other fundamental variables all play a role in determining what comparative
advantage one country has over another in the global marketplace and so getting the assumption
for business success.

COUNTRY EVALUATION AND SELECTION

• To see how scanning techniques can help managers both limit geographic alternatives
 and consider otherwise overlooked areas
• To discern the major opportunity and risk variables a company should consider when
deciding whether and where to expand abroad
• To know the methods and problems when collecting and comparing information
internationally
• To understand some simplifying tools for helping to decide where to operate
• To consider how companies allocate emphasis among the countries where they operate
• To comprehend why location decisions do not necessarily compare different countries

The country evaluation and selection process determines the geographical opportunities firms
choose to pursue. Chapter Twelve first discusses the challenges of marketing and production site
location. It goes on to carefully examine the process by describing the choice and weighting of
variables used for opportunity and risk analysis as well as the inherent problems associated with
data collection and analysis. The chapter then introduces the use of grids and matrices for
country comparison purposes, discusses resource allocation possibilities, and concludes by
noting the different factors considered as part of start-up, acquisition, and expansion decisions.

ISSUE IN ASSET PROTECTION:

The goal of a comprehensive asset-protection plan is to prevent or significantly reduce risk by
insulating your business and personal assets from the claims of creditors. Unfortunately, most
small-business owners are unaware of all the potential risks that can harm their business and the
options available to protect themselves. An asset-protection plan employs legal strategies, put
in place before a lawsuit or claim arises, that can deter a potential claimant or help prevent the
seizure of your assets after a judgment. If you haven't already put your asset-protection plan in
place, don't wait. The longer the plan has been in existence, the stronger it likely will be.

Internal claims arise from creditors whose remedy is limited to assets of a particular entity, such
as a corporation. For example, if you have a corporation that owns a piece of real estate and
someone slips and falls on the property owned by the corporation, the injured party is limited to
pursuing the corporation's assets (i.e., the real estate). This assumes you did not cause the injury.

External claims are not limited to the assets of the entity and can extend to your personal assets.
For instance, if the same corporation owned a truck that you negligently drove into a crowd of
pedestrians, the injured could not only sue the corporation but also you, and satisfy any judgment
from corporate assets as well as your personal assets.

Types of asset
• Dangerous assert
• Business asset
• Safe assets.

GLOBALISATION WITH RESPONSIBILITY

Globalization is a dynamic set of social processes that is transforming our present social condition of
nationality into one of globality, characterised by tight global economic, political, cultural, and
environmental interconnections that make most of the currently existing borders and boundaries
irrelevant.

The economic dimension of globalisation is highly significant in shaping contemporary societies

and organisations through the intensification and stretching of economic interrelations worldwide.
Its key components include the deregulation of interest rates, the removal of credit controls, and
the privatisation of government-owned banks and financial institutions. Globalisation of financial
trading allows for increased mobility among different segments of the financial industry, with
fewer restrictions and greater investment opportunities.

The enhanced role of international economic institutions such as the International Monetary Fund
(IMF), World Bank, and World Trade Organisation (WTO) enjoy the privilege position of making
and enforcing the rules of the global economy. In return for supplying much-needed loans to
developing countries these institutions implemented the structural adjustment programs, mainly
directed at countries with large foreign debts. It can be observed the impacts that trade
liberalisation policies have on industries in the third world.

But globalisation is a multidimensional concept that is not easily reduced to just the economic
dimension. The intensification of global economic interconnections is set into motion by a series
of political decisions. The political dimension of globalisation refers to the intensification and
expansion of political interrelations across the globe. Recent economic developments such as trade
liberalisation and deregulation have significantly constrained the set of political options open to
states. Thus, global markets frequently undermine the capacity of governments to set independent
national policy restrictions.

WORLD ECONOMIC GROWTH AND ENVIRONMENT

The issue of economic growth and the environment essentially concerns the kinds of pressures
that economic growth, at the national and international level, places on the environment over
time. The relationship between ecology and the economy has become increasingly significant as
humans gradually understand the impact that economic decisions have on the sustainability and
quality of the planet.

Economic growth is commonly defined as increases in total output from new resources or better
use of existing resources; it is measured by increased real incomes per capita. All economic
growth involves transforming the natural world, and it can effect environmental quality in one of
three ways. Environmental quality can increase with growth. Increased incomes, for example,
provide the resources for public services such as sanitation and rural electricity. With these
services widely available, individuals need to worry less about day-to-day survival and can
devote more resources to conservation . Second, environmental quality can initially worsen but
then improve as the growth rate rises. In the cases of air pollution , water pollution ,
and deforestation and encroachment there is little incentive for any individual to invest in
maintaining the quality of the environment. These problems can only improve when countries
deliberately introduce long-range policies to ensure that additional resources are devoted to
dealing with them. Third, environmental quality can decrease when the rate of growth increases.
In the cases of emissions generated by the disposal of municipal solid waste , for example,
abatement is relatively expensive and the costs associated with the emissions and wastes are not
perceived as high because they are often borne by someone else.

The earth's natural resources place limits on economic growth. These limits vary with the extent
of resource substitution, technical progress, and structural changes. For example, in the late
1960s many feared that the world's supply of useful metals would run out. Yet, today, there is a
glut of useful metals and prices have fallen dramatically. The demand for other natural resources
such as water, however, often exceeds supply. In arid regions such as the Middle East and in
non-arid regions such as northern China, aquifers have been depleted and rivers so extensively
drained that not only irrigation and agriculture are threatened but the local ecosystems.
FOR LECTURE REFERENCE

https://www.youtube.com/watch?v=bPvydDQlgm4

Discussion on tariff and non tariff barriers.

https://www.youtube.com/watch?v=3Gqq2sBWai4

Introduction to WTO.

https://www.youtube.com/watch?v=b_Fm8sW_g98

Introduction to foreign exchange market.

https://www.youtube.com/watch?v=GtPZZ-CzfkE

Entering into foreign market.

 MULTIPLE CHOICE QUESTIONS

INTERNATIONAL BUSINESS

1. ___________ is consists of the totality of all factors within or outside

the control of individual business firms.
a) Business b) Environment
c) Business environment d) organization
2. Environment is always changing constraining and ____________
a) Competing b) Uncertain
c) dynamic d) Specific
3. Environment is a __________ process
a) Dynamic b) Complex
c) interactive d) All of the above
4. _______________ is the product of environment.
a) Opportunity b) Threads
c) Business d) Factors
5. There are two sets of factors which influence the business of an
enterprise is____________
a) Internal and External b) Micro and Macro
c) Political and Legal d) Social, Cultural &
Technological
6. ___________ plays a vital role in running the business
enterprise.
a) Customers b) Labor
c) Product d) Competitors
Ans. D
7. ___________ Consists of the actors in the company's immediate
environment that affect the performance of the company.
a) Macro environment b) Micro environment
c) Internal environment d) External environment
Ans. B
8. Macro environment is also known as __________
a) Outside environment b) Indirect environment
c) General environment d) Social environment
Ans. C
9. Remote environment is an another name of __________
a) Micro environment b) Macro environment
c) Internal environment d) External environment
Ans. B
10. ____________ is environment covers those factors which give
shape and form to the dept. of economic activities. a)
Technological b) Demographic
c) Social and cultural d) Economic
Ans. D
11. A stable, honest and efficient political system is a primary factor
for the growth
of ______________
a) Business b) General environment
c) Economic conditions d) Natural environment
Ans. A
12. When the rate of change in is insignificant, it is termed as
________ environment
a) General or specific b) Stable or static
c) Dynamic or certain d) Simple of complex
Ans. B
13. When some sudden and unpredictable changes take place in the
organisation is said to ___________
a) Technological environment b) Natural environment
c) Turbulent environment d) Changing environment
Ans. C
14. ___________ is an open form of government.
a) Parliamentary System b) Government environment
c) Legal environment d) Political environment
Ans. A
15. China is the biggest example _________
a) Capitalism b) Mixed economy
c) Laissez Faire d)
Socialism Ans. D
16. The term _________ relates to patent, trademarks, copyrights and
trade secrets.
a) Priority right b) Intellectual property right
c) Tariff & Trade Act d) Madrid agreement
Ans. B
17. ____________ is also called the International convention for the
protection of industrial property.
a) Paris Union b) National Treatment
c) Industrial Policy Act d) Intellectual
property Right Ans. A.
18. ____________ means that if an investor registers a patent
in one member country, he can file an application for
registration in other member countries within one year from
the date of filing return, a) Patent cooperation Treaty b) Paris
Union
c) Priority Right d) National Treatment
Ans. C
19. The international registration of Trade Marks aims at the
international registration is ________
a) Trade Mark Registration Treat b) Independent of patents
c) Patent Cooperation Treaty d) The Madrid Agreement
Ans. D
20. International Bureau of World Intellectual Property Organisation is
________
a) U.S.A. b) Geneva
c) Switzerland d) Canada
Ans. B
21. _________ Involves infringement of a patent or trade mark.
a) Counter feiting b) Unauthorised product
c) Illegal goods d) Low quality products
Ans. A
22. _______ is an unintented channel of distribution that runs parallel to
the planned channel.
a) Bribery b) Counter feiting
c) Gray Market d) Black Market
Ans. C
23. ___________ concentrates on the analysis of market, competition
and financial strength of a company.
a) Risk Reward analysis b) Cost benefit analysis
c) Break even analysis d) None of the above
Ans. B
24. _________ analysis studies the impact of various environmental
factors on the marketing mix.
a) Break even analysis b) Risk reward analysis
c) Cost - benefit analysis d) Product Analysis
Ans. B
25. __________ is subjective in nature
a) Social interaction b) Political factors
c) Natural factors d) Cultural
Ans. D
 26. __________ is a set of traditional beliefs and values which are
passed and shared among different societies
a) Cultural environment b) Social environment
c) Socio - cultural environment d) Economic
Ans. C
27. __________ is the foundation of culture
a) Language b) Customs
c) Education
d) Religion
Ans. A
28. E.E.C stands for
a) European Economics Control b) European Economic Community
c) European Economic centre d) European Economic Committee
Ans. B
29. E.E.C. is also known as ________
a) Economic Common Market b) NFTA
c) IPA d) European Common Market
Ans. D
30. ECM was brought into being __________
a) 31 Dec. 1957 b) 15 Jan, 1958
c) 1 Jan, 1958 d) 24 March 1957
Ans. C
31. World's largest trading Block is ______
a) NAFTA b) SAARC
c) CEC d) ECM
Ans. D
32. NAFTA mean __________
a) North American Free Trade Agreement
b) North American Foreign Trade Agreement
c) North Asian Free Trade Agreement
d) North Asian Foreign Trade Agreement.
Ans. B
33. NAFTA is a series of bilateral agreement between America, Canada
and
_________
a) Geneva b) Mexico
c) UK d) Ireland
Ans. B
34. SAARC association brings together __________ countries of
South Asia for regional co-operation. a) 9 b) 8
c) 7 d) 14
 Ans. C
35. The head quarters of SAARC in _______
a) Bangladesh b) Maldives
c) Sri Lanka d) Kathmandu
Ans. D
36. ________ was commenced on January 1, 1994
a) NAFTA b) ECM
c) SAARC d) CEC
Ans. A
37. ______________ is a bilateral trade agreement between two
countries.
a) Tie in Agreement b) Counter trade
c) MNC d) Gray Market
Ans. B
38. _______ is the process of convincing the various powerful
elements of the environment to act in the favour of the
organisations. a) Coalescing b) Cooptation
c) Lobbying d) Procurement
Ans. C
39. Two or more organisations may merger their organisations to have
better controlover the environment as various resources are pooled
together is __________ a) Cooptation b) Lobbying
c)Agreement d) Coalescing
Ans. D
40. _________ was a Multilateral treaty encompassing rules and
disciples for anorderly world trading system. a) GATT b) ITO
c) ECM d) SAARC
Ans. A
41. __________ means each nation shall be treated as well, as the most
favoured nation.
a) GATT b) MFN
c) FTZ d) TRRM
Ans. B
42. Trade in Textile was restricted by _________
a) MFN b) GATT
c) MFA d) ITO
Ans. C
43. __________ is known a neo-liberalism
a) Globaluation b) Liberalisation
c) Privatization d) None of the above
Ans. A
 44. ________ refers to a process of increasing economic
integration and growing economic interdependence between
countries in the world economy. a) MNC b) TNC
c) Globalisation d) WTO
Ans. C
45. _________ means acceptance of an outward looking
policy of economic development in place of an inward –
looking one. a) Liberalization b) Privatisation
c) Globalisatiion d) All of the above
Ans. C
46. ESCAP stands for _______
a) Economic and Social Commission for Asia and the Pacific
b) Economic and Social Centre for Asia and the Pacific
c) Economic and Social Commission for the Asia and Privatisation
d) Economic and Social Culture for Asia and Public
Ans: A
47. __________ is a method of doing business by which a franchisee is
granted the right to offer, sell or distribute goods or service under a
system created by the Franchisee.
a) Agreement b) Dealership
c) Patent d) Franchising
Ans. D
48. ________ means setting a products a company to its affiliated
company in host country.
a) Direct exporting b) Intra corporate transfer
c) indirect exporting d) Exporting
Ans. B
49. BOT means ____________
a) Business Outsourcing Trade
b) Balance on Trade
c) Build, operation and Transfer
d) Business Outsourcing Transaction
Ans: C
50. FERA was replaced by _______
a) FEMA b) GATT
c) WTO d) ITO
Ans. A
51. WTO was setup in ______
a) 1995 b) 1992
c) 1996 d) 1994
Ans. D
52. ________ is the process of contracting with foreign firms granting
them proprietary right to use technology, copyrights, trade marks, brand
names etc. a) Franchising b) Licensing
c) Contract d) None of the above
Ans. B
53. __________ arrangement is also known as cross licensing
a) Licensing b) Franchising
c) Intra corporate transfers d) Contracts
Ans. A
54. A company doing international marketing contracts with a
foreign producer to manufacture or assemble the products for a sale
in the foreign market is ________ a) Management contract b)
Contract Manufacturing
c) Turnkey Contract d) Licensing
Ans. B
55. _________ are therefore arrangement where by for a fee, one
company provides personnel to perform general specialised
management functions for another company.
a) Lisensing b) Franchising
c) Contract Manufacturing d) Management contract
Ans. D
56. _________ is a contract under which a firm agrees to fully design,
construct and equip a manufacturing or business or service facility and
turn the project to the purchaser ready for operation for a remuneration.
a) Manufacturing contract b) Management contract
c)Turnkey contracts d) Joint venture
Ans. C
57. __________ is part of the parent corporation and simply an
extension of domestic operation.
a) Foreign Subsidiary b) Overseas branch
c) Third country location d) Assembly operation
Ans. B
58. _________ is a separate company organised under a foreign
nations legal code with accountability distinct from the parent
company. a) Foreign subsidiary b) Oversees branch
c) Assembly operation d) Fully owned manufacturing
Ans. A
59. _________ is a peculiar form of international trade that
encompasses more than an exchange of goods services or idea for
money. a) Turnkey contract b) Licensing
 c) Counter Trade d) Buy back
Ans. C
60. __________ of economic policy is intended to promote the
integration of Indian economy with the global economy. a)
Globalisatioin b) Liberalisation
c) Privatisation d) None of the above
Ans. B
61. _________ is an enterprise which allocates company resources without regards to national
frontiers, but is nationally based in terms of ownership and top management.
a) MNC b) Globalisation
c) Liberalisation d) TNC
Ans. A
62. __________ conference of 1944 suggested institutional
arrangements to undertake post wear reconstruction of global economy.
a) Urugay Round Agreement b) Narasimham Committee
c) Brotton woods d) Hilton Young Commission
Ans. C
63. The GATT agreement had been signed by governments known as
_____
a) Member countries b) Trade members
c) MFN d) Contracting Parties
Ans. D
64. Article XIX of the GATT provided ________
a) General prohibition of QRs
b) Emergency safeguard code
c) Schedule of Tariff Concessions
d) MFN Clause
Ans. B
65. GATT agreements as modified by the _______agreement
a) WTO b) ITO
c) Uruguay Round d) Bretton wood
Ans. C
66. _____________ is in fact, policeman of global trade.
a) GATT b) ITO
c) TRIMS d) WTO
Ans. D
67. _______ is the Supreme Authority of the WTO
a) General Council b) Ministerial conference
c) Council for Trade in Goods d) Council for TRIPS
Ans. B
 68. Council for Trade in Goods, Services and Intellectual property
Rights, Council for Trade Related intellectual property Rights are the
three council in General council of _________
a) WTO b) GATT
c) TRIMS d) GATS
Ans. A
69. The Secretariat of the WTO is headed by the _______
a) General Council b) Ministerial conference
c) Director General d) Council for TRIPS
Ans. C
70. ____________ is a permanent institution with its own Secretariat.
a) WTO b) GATT
c) GAT d) ITO
Ans. A
71. GATT was applied on a _________
a) Permanent basis b) Provisional basis
c) Both a and b d) None of the above
` Ans. B
72. Initial registration and each renewal of registration, of a trade mark
is for a term of not less than ______ a) 5 years b) 4 years
c) 6 years d) 7 years
And. D
73. The agreement of patent protection for _______
a) 20 years b) 15 years
c) 10 years d) 7 years
Ans. A
74. Plurilateral Trade Agreement was done at Ganeva in ______
a) March 1979 b) April 1979
c) January 1994 d) August 1984
Ans. B
75. NIEO means_________
a) New International Economic Order
b) New Industrial Economic Order
c) New Industrial Economic Organisation
d) New International Economic Organisation
Ans. A
76. __________ is the effect International Trade has a detrimental effect
on under developed countries
a) Lop - sided development b) Deterioration
c) Demonstration effect d) None of the above
Ans. C
77. The manor attributes of international financial system are
knowledge, certainty and _________
a) Flexibility b) Predictability
c) Continuity d) Structural
Ans. B
78. _________ established a mechanism where by their local currencies
are kept equal in value to gold and to each other.
a) International money b) Floating exchange rate
c) Bretton wwod system d) International Gold standard
Ans. D
79. IMF was organised in ________
a) 1948 b) `1946
c) 1956 d) 1958
Ans. B
80. Member's Gold Subscription + Credit extended by the member
through the fund to other members _________
a) Gold Tranche b) Credit Tranches
c) Gold standard Machanism d) Floating exchange rate
Ans. A
81. ___________ was introduced in 1969
a) Oil Facility b) Extended facility
c) Buffer stock facility d) Trust Fund facility
Ans. C
82. ________ are made by the fund out of the profits it has made by its
gold rate operations
a) Oil Facility b) Gold standard Mechanism
c) Buffer stock facility d) Trust Fund Loan facility
83. If the funds holdings of a member's currency are less than 100%
of the member's quota, the difference is called _________ a) Credit
Tranche b) Reserve Tranche
c) Gold Tranche d) All of the above
84. In the form of pound sterling and U.S. dollars, these two currencies
were known as
__________
a) Reserve currencies b) Foreign exchange
c) Floating Exchange rate d) Exchange transaction
Ans. A
85. SDR was approved in _________
a) 1969 b) 1965
c) 1967 d) 1972
Ans. C
86. __________ will include interest and amortization payment, put a
strain on future balance of payments
a) Credit Servicing charges b) Debit servicing charges
c) Both a and b d) None of the above
Ans. B
87. India is _________ place in IMF General Quota
a) 12th b) 11th
c) 9th d) 13th
Ans. D
88. ___________ are also known as International Bank for
Reconstruction and Development.
a) IMF b) ADB
c) World Bank d) ECM
Ans. C
89. _________ is the Supreme governing authority of World Bank.
a) The president b) The Executive Directors
c) The Board of Governors d) Members of the Board
Ans. C
90. _________ becomes the Ex-officio Chairman of World Bank.
a) The Board of Governors b) The Executive Directors
c) Other members d) The President
And. D
91. __________ is responsible for the conduct of the ordinary business
of the bank and its organisation
a) The Governor b) The President
c) The Executive Directors d) Other members
Ans. B
92. In the day to day administration the Board delegates its power to
___________
a) Other members b) The Board of Governors
c) The President d) The Executive Directors
Ans. D
93. ADB was setup in ________
a) 1969 b) 1967
c) 1966 d) 1968
Ans. C
94. The headquarters of ADB is _________
a) Geneva b) Manila
c) U.S.A d) Italy
Ans. B
95. The highest policy making body of the ADB is __________
a) Board of Governors b) Board of Directors
c) President d) Other members
Ans. A
96. To take decisions of loan application in ADB by
a) Board of Governors b) Board of Directors
c) The President d) Other members
Ans. B
97. The President elected for a term __________ in ADB
a) 3 Years b) 4 Years
c) 5 Years d) 6 Years
Ans. C
98. _________ is also known as the European Common Market.
a) EEC b) CEC
c) SADF d) NAFTA
Ans. A
99. _________ is the most successful of the integration schemes.
a) ECM b) SAARC
c) NAFTA d) CEC
Ans. A
100. __________ is the World's largest
trading block a) NAFTA b) EEC
c) SAARC d) GATT
Ans. B
101. GATT was replaced by the WTO
on _________ a) 1 Jan. 2004 b) 1 Jan
1996
c) 1 Jan. 1992 d) 1 Jan. 1995 Ans. d
102. Under _________ approach companies view the entire
world as a single country.
a) Geocentric b) Regio centric
c) Poly centric d) Ethno centric Ans. a
103. Companies establish foreign subsidiary and empowers its
executives is
_________
a) Regio centric b) Geocentric
c) Poly centric d) Ethno centric Ans. c
104. _________ theory suggests for maintaining
favourable balance of trade in the form of import of
gold for export of goods and services. a) Gold standard
b) Mercantilism
c) Non merchantilism d) Breton wood system Ans. b
105. _________ is the application of knowledge which
redefine the boundaries of global business.
a) Cultural factors b) Political factors
c) Social factors d)
Technology Ans. d 106.
_________ is a form of
licensing a) Franchising
b) Patent
c) Brand d) None of the above Ans. a
107. _________ is the long term contracting out of
non-core business processes to an outside to help
achieve increased share holder value a) Contract
manufacturing b) BPO
c) Management contract d) Turnkey contract Ans. b
108. A _________ is a contract under which a firm agrees
to fully design, construct and equip a
manufacturing/business service facility and turn the
project over to the purchaser when it is ready for
operation for a remuneration.
a) BPO b) Contract Manufacturing
c) Turnkey project d) Management
contract Ans. c 109. First WTO Ministerial
conference held in _________ a) Geneva
b) Singapore
c) Manila d) Dona Ans. b
110. In WTO _________ is the highest hierarchical level in
the organizational structure.
a) General council b) Committee and
Management Bodies
c) Management Bodies d) Ministerial conference Ans. d
111. _________ is the sale of goods abroad at a price
which is lower than the selling price of the same goods at
the same time in the same circumstances at home, taking
account of difference in transport costs. a) Dumping b)
Tariff
c) Anti dumping d) None of the above Ans. a
112. When the production of a product is more than
the demand in the home country, the stocks piled up
even after sales is _________ a) Persistent Dumping
b) Predatory dumping
c) Intermittent Dumping d) Anti Dumping Ans. c
113. The monopolist sells the remaining production in foreign
countries at a low price continuously in _________
a) Intermittent Dumping b) Persistent Dumping
c) Predatory Dumping d) Anti dumping Ans. b
114. The monopolist sells the product in a foreign
market at a low price initially with a view to drive away
the competitors and increase the price after the
competitors leave the market in _________ a) Predatory
dumping b) Intermittent dumping
c) Persistent dumping d) Anti duping Ans. a
115. India was one of the _________ Governments that
become members of the WTO on the first day of the
formation of the WTO a) 56 b) 96
c) 76 d) 103 Ans. c
116. EU Council Committee is also
called _________ a) Corper b)
Executive body
c) Advisory committee d) Commissioners
Ans. a 117. The Corper is the link between
the EU and _________ a) Commissioners b)
Council
c) Executive body d) Member Governments Ans. d
118. The North American Free Trade Agreement (NAFTA)
came into being on _________
a) 1 Jan. 1992 b) 1 March 1996
c) 1 Jan. 1994 d) 1 March 1994
Ans. c
119. In the year 1989 _________
was established a) NAFTA b)
APEC
c) ESCAP d) SAARC Ans. b
120. _________ is expected to eliminate all tariffs and trade
barriers among the USA, Canada and Mexico. a) SAARC b)
ASEAN
c) NAFTA d)
EEC Ans. d
 121. OPEC
means
_________
a) Organisation of Petroleum Exporting Countries
b) Organisation of Pacific Economic Co-operation
c) Organisation of Pacific European Co-operation
d) Organisation of Pacific Exporting Commission Ans. a
122. The remaining balance of quota, after drawing 25% of
reserve trench is called _________
a) God Trench b) Credit trench
c) Quotas d) Fund lending Ans. b
123. The short fall of the member's currency with fund over
its quota is called _________
a) Gold trench b) Credit trench
c) Reserve trench d) Quotas Ans. c
124. _________ are popularly known as
"Paper Gold". a) Gold trench b) Gold
standard
c) Gold Exchange Standard d) Special
Drawing Rights Ans. d 125. _________ is
popularly known as World Bank a) IBRD b)
IDA
c) ADB d) IMF Ans. a
126. IDA was established primarily to provide finance to less developed
member countries on a _________ basis. a) Credit b) Soft loan
c) Debit d) Hard loan
Ans. b 127. IDA loans
are known as _________
a) IDA credit b) IDA
debit
c) Soft loan d) Both a and b Ans. a
128. The first conference of the UNCTAD was held
in _________ a) USA b) Seattle
c) Geneva d) Mexica Ans. c
129. The product is sold at a high price in international
markets and at a low price in the domestic market is
called _________ a) Reverse dumping b) Persistent
dumping
c) Predatory dumping d) Sporadic dumping Ans. a
130. _________ is an arrangement to pay for import of goods
and services with something other than cash.
 a) Turkey contract b) Counter Trade
c) Dumping d) None of the
above Ans. b 131. _________
is goods - for - goods deal a)
Contract b) Trade
c) Counter Trade d) Purchase Ans. c
132. Privatisation may be effected in the form
of _________ a) Liberalisation b)
Globalisation
c) Dis-investment d) None of the above Ans. c
133. The industrial policy of the Government of India was declared by
_________
a) Indira Gandhi b) Rajeev Gandhi
c) Narasimha Rao d) Jawaharlal Nehru Ans. d
134. The Industrial Policy Resolution 1956 was known
as _________ a) New Industrial Policy b) Economic
Policy
c) Economic Constitution of
India
d) Industrial reforms Ans. c
135. _________ consisted of 17 industries and future
development of the industry, it is to be excluded
responsibility of the state a) Schedule B b) Schedule A
c) Schedule D d) Schedule C Ans. b
136. The organization is said to be when some sudden and
unpredictable changes take place is called _________
a) Changing environment b) Stable environment
c) Natural environment d) Turbulent environment Ans. d
137. In an organisation, changes occur slowly but threat occurs in
cluster is called _________
a) Placid - clustered environment
b) Placid - rando-mixed environment
c) Disturbed - reactive environment
d) Turbulent field environment Ans. a
138. _________ is a device used to establish a set of
priorities for using the organization’s scarce resources a)
Buffering b) Rationing
c) Smoothing d) Coalescing Ans. b
139. _________ is the process of convincing the various
powerful elements of the environment to act in the favour of
the organisations. a) Coalescing b) Co-optation
c) Lobbying d) None of the above
Ans. c 140. _________ is an open
forum of government a) Two
party system b) Single party
system
c) Dominated one party system d) Parliamentary system
Ans. d 141. _________ is an unintended channel of
distribution that runs parallel to the planned channel.
a) Gray market b) Black market
c) Bribery d) Counterfeiting Ans. a
142. Culture is _________
a) Subjective b) Prescriptive
c) Cumulative d) All of the above Ans. d
143. ________ is a series of bilateral agreement between
America, Canada and Mexico
a) SAARC b) APEC
c) NAFTA d) ASEAN Ans. c
144. ______ agreement as modified by the Bretton
wood agreement. a) WTO b) ITO
c) GAAT d) TRIMS Ans: c
145. _________ means replacement of existing non-tariff
restriction on trade such as import quotas.
a) Tariffication b) Tariff binding
c) Tariff cuts d) Reduction in subsidies Ans. a
146. The import aspects of the UR agreement on
agriculture include Tariffication, Tariff binding,
Tariff cuts and _________ a) Tariff b) Tariff rates
c) Reduction in subsidies and d) None of the above
Ans. c
domestic support
147. The combined package of trade rules and Tariff
concessions became known as the _________ a) WTO b)
GATT
c) NAFTA d) SAARC Ans. b
148. _________ may be defined as "information with a
commercial value". a) GATT b) TRIPS
c) WTO d) IPRS Ans. d
149. Creators can be given the right to prevent others
from using their inventions, designs or other creations
is known as _________ a) TRIMS b) TRIPS
 c) IPRS d) GAAT Ans. c
150. _________ was a set of rules and multilateral agreement
a) TRIPS b) TRIMS
c) GAAT d) WTO Ans. c
151. In TRIPS, a patent would be applicable
for _________ a) 10 Years b) 20 years
c) 25 years d) 30 years Ans.
b 152. GATS covers which
of the following?
a) Cross-border equity b) Consumption abroad
c) Commercial presence d) All the above
Ans. d 153. WTO Anti-dumping agreement
doesn't have _________ a) rules for
calculating the amount of dumping
b) procedures for conducting anti-dumping investigations
c) rules for setting disputes related to restrictive quota practices
d) standards for dispute settlement panels to apply in anti-
dumpingdisputes
Ans. c
154. The time limit specified by the Agreement on import
licensing for the agencies to deal with the procedure. a) 15
days b) 30 days
c) 60 days d) 90 days Ans. b
155. The rules and commitment of Agreement on Agriculture apply to
_________
a) Market access b) Domestic support
c) Export subsidies and otherprograms
d) All the above Ans. d
156. _________ duties can be imposed of a product is
dumped in the importing country at less than its
normal value provided it causes material injury to the
domestic industry. a) Tariff b) Anti-dumping
c) Countervailing d) Reduction in subsidies Ans. b
157. _________ are maximum tariffs imposed by the member countries
of
WTO.
a) Rates b) Subsidies
c) Quotas d) Bound rates Ans. d
158. The fundamental principles of GATT was
a) Most Favoured Nation b) National Treatment
c) Both a and b d) None of the above Ans. b
 159. Anti-dumping and countervailing duties are imposed
under _________ a) Customs Tariff Act 1975 b) TRIMS
c) TRIPS d) Regional Trade Agreement Ans. a
160. Bhutan has Bilateral Trade Agreement
with _________ a) Sri Lanka b) Pakistan
c) Russia d) India Ans. d
161. FMCG means
a) Fast Moving Consumer Goods
b) Foreign Measures on Consumer Goods
c) Freely Moving Consumer Goods
d) Free Measures on Consumer Goods Ans. a
162. Copyright means the exclusive right to do or
authorize others to do certain acts in relation to
_________ a) Literary, dramatic, musical or artistic
work
b) Cinematography
c) Sound recordings d) All the above Ans. d
163. Which one of the following is the function
of trade mark a) Identifies the product and its
origin
b) Guaranteed its unchanged quality
c) Advertises the product
d) All the above Ans. d
164. _________ is the art and other manifestations of
human customs, civilization and the way of life a
particular society or group. a) Culture b) Trends
c) Business d) Marketing Ans. a
165. The cultural habit of firm hand-shake is associated with the culture
of
_________
a) US b) Middle East
c) Arab countries d) Japan Ans. a
166. The Highest Hofstadter Dimension for a culture
is _________ a) LTO b) PDI
c) UAI d) IDV Ans. b
167. A separate Bilateral NAFTA on market access
for agricultural products with Canada and
_________ a) America b) Britain
c) Mexico d) Japan Ans. c
168. The SAARC countries comprise _________
a) Indonesia, Malaysia, Philippines, Singapore, Thailand, Bhutan,
 Nepal
b) Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri
Lanka
c) Sri Lanka, Bhutan, Nepal, China, India, Bangladesh, Indonesia
d) Bangladesh, Bhutan, China, Nepal, Pakistan, India, Sri Lanka Ans.
b169. _________ provides a platform for the peoples of South Asia
to work together in a spirit of friendship trust and undertaking. a)
OECS b) ASEAN
c) SAARC d) NAFTA Ans. c
170. ASEAN established on 8 August 1967
in _________ a) Katmandu b) Singapore
c) Bangkok d) Nepal Ans. c
171. ASEAN was established by the five original member countries are
_________
a) Indonesia, Malaysia, Philippines, Singapore and Thailand
b) India, Malaysia, Bhutan, Singapore, Thailand
c) India, Sri Lanka, Malaysia, Philippines, Thailand
d) India, Sri Lanka, Singapore, Thailand, Malaysia Ans. a172. The
exchange rate system under the IMF came to be known as
_________
a) Gold standard b) Floating rate
c) SDRS d) Breton Wood System Ans. d
173. _________ were created as a reserve
asset by the IMF a) Floating rate b) SDR
c) Credit trench d) God standard Ans. b
174. The _________ of a country refers to the systematic
record of all receipts and payments between residents of the
country and nonresidents over a period of time.
a) Pegging b) Extended Fund Facility
c) BOP d) Structural Adjustment
Facility
Ans. c
175. Holding _________ gives the bearer the option to
acquire foreign exchange from the monetary authorities
of another member of the IMF a) SDR b) Gold standard
c) Credit trench d) All of the above Ans. a
176. Which of the following is a form of contractual
agreement _________ a) Franchising b) Licensing
c) Joint venture d) Both a and b Ans. d
177. Build, operate and transfer is the basic principle
of _________ a) Strategic alliance b) Turnkey
projects
 c) Contract Manufacturing d) Management
Contract Ans. b 178. Which of the
following is not a joint venture? a)
Licensing b) Franchising
c) Strategic alliance d) Contract Manufacturing Ans. c
179. _________ allows a company to conduct business in
another country whose laws discourage foreign ownership
a) Contract Manufacturing b) Licensing
c) Franchising d) Joint venture Ans. b
180. Which country is known for group harmony and
collectivism? a) USA b) France
c) Germany d) Japan Ans. d
181. Globalization is based on
the theory of a) Mixed
economy b) Capitalism
c) Free trade and comparativeadvantage
d) Import Substitution Ans. c
182. The process of globalization of the economy refers
to _________ a) Removal of restrictions on foreign trade
and foreign investment
b) Economic growth
c) Foreign investment in flow
d) Employment generation Ans. a
183. The member countries of WTO have moved to
"Product Patent Regime" under _________ a)
TRIMS b) TRIPS
c) GATTS d) SAPTA Ans. b
184. Contract Manufacturing is a form
of _________ a) Acquisition b)
Franchising
c) Licensing d) Joint
venture Ans. d 185.
GATS operates on
_________ levels a) 2 b) 6
c) 7 d) 3 Ans. d
186. _________ is the first ever set of multilateral, legally
enforceable rules covering international trade in services. a)
GATS b) TRIPS
c) TRIMS d) WTO Ans. a
187. _________ means treating one's
trading equally a) GATS b) WTO
c) MFN d) TRIPS Ans. c
188. MFA was replaced on 1 Jan. 1995
by _________ a) AOA b) ATC
c) GATS d) TRIMS Ans.
b 189. Removal of QRS
means _________
a) Duty free imports b) An item
can be imported without import
license or quotas
c) All imports are free of tariffs d) None of
the above Ans. b 190. India has Bilateral
Trade Agreement with _________ a) Sri
Lanka b) Pakistan
c) Nepal d) Bhutan Ans. d
191. _________ transfers are selling of products by a
company to its affiliated company in host country.
a) Indirect export b) Direct exporting
c) Intra-corporate d) All the above Ans. c
192. _________ is the long term contracting out of non-core
business processes to an outside provider to help achieve
increased shareholder value.
a) BPO b) Turnkey project
c) Contract Manufacturing d) Management
Contract Ans. a 193. WTO members abolished
quotas on trade in _________ a) Agriculture b)
Textiles and clothing
c) Tropical products d) Natural Resources based
products
Ans. b
194. ___________ operates as a co-operative, multi-lateral,
economic and trade forum.
a) ASEAN b) APEC
c) SAARC c) ESCAP Ans:b
195. _______ is the fastest growing trading bloc in the world.
a) MERCOSUR b) NAFTA
c) EEC d) ESCAP Ans:a
196. Marketing forces to determine the exchange rate of
currencies under ______.
a) Gold Standard b) Bretton wood system
c) Floating rate system d) Credit Tranche
Ans:c 197. _______ is called the soft loan
window of the IBRD. a) IFC b) IDA
c) UNCTAD d) IMF Ans:b
198. _____ is a joint venture of
IBRD and IFC. a) UNCTAD b)
IDA
c) IMF d) MIGA Ans:d
199. _____ promotes the development friendly
integration of developing countries into the world
economy. a) UNCTAD b) IBRD
c) IMF d) IDA Ans:a
200. _____ provides long term loans at a very low rate of
interest to the less developed countries. a) IFC b) IDA
b) IBRD d) MIGA Ans:b

FOR MORE MULTIPLE CHOICE QUESTIONS

https://www.avatto.com/ugc-net-exam/commerce/mcqs/ugc-net/questions/446/1.html

https://www.indiaclass.com/international-business-multiple-choice-questions/

https://wps.pearsoned.co.uk/ema_uk_he_griffiths_econbus_3/201/51564/13200386.cw/-
/13200394/index.html

https://www.eguardian.co.in/global-business-environment/

https://commercestudyguide.com/mcq-international-business/