Multiple Choice Questions

1. The first phase of globalization started around 1870 and ended with …..
a. The World War I

b. The World War II

c. The Establishment of GATT

d. In 1913 when GDP was High

Ans: a

2. IBRD (International Bank for Reconstruction and Development) also known as

a. Exim Bank

b. World Bank

c. International Monetary fund

d. International Bank

Ans: b

3. Ultimately ………………was replaced by the …………….on 1st Jan 1995

a. GATS, WTO

b. WTO, GATT

c. GATT, WTO

d. IMF, GATT

Answer: c

4. Which is the right sequence of a stages of Internationalization

a. Domestic, Transnational, Global, International, Multinational

b. Domestic, International, Multinational, Global, Transnational

c. Domestic, Multinatinal, International, Transnational, Global

d. Domestic, Internatinal, Transnational, Multinational, Global

Answer: b
5. Subsidiaries consider regional environment for policy  / Strategy formulation is
known as
a. Polycentric Approach

b. Regiocentric Approach

c. Ethnocentric Approach

d. Geocentric  Approach

Answer: b

6. According to this theory the holdings of  a country’s treasure primarily in the form
of gold constituted its wealth.
a. Gold Theory

b. Ricardo Theory

c. Mercantilism

d. Hecksher Theory

Answer:c

7. The Theory of Absolute Cost Advantage is given by

a. David Ricardo

b. Adam Smith

c. F W Taylor

d. Ohlin and Heckscher

Answer:b

8. The Theory of Relative Factor Endowments is given by

a. David Ricardo

b. Adam Smith

c. F W Taussig

d. Ohlin and Hecksher

Answer: d

9. The theory of Comparative cost advantage is given by

a. David Ricardo

b. Adam Smith

c. F W Taussig

d. Ohlin and Hecksher

Answer: a

10. ……………is application of knowledge which redefine the boundaries of global

business
a. Cultural Values

b. Society

c. Technology

d. Economy

Answer:c

11. Capitalistic, communistic and Mixed are the types of

a. Economic System

b. Social System

c. Cultural Attitudes

d. Political System

Answer:a

12. Which is not an Indian Multinational Company?

a. Unilever    
b. Asian Paints

c. Piramal

d. Wipro

Answer: a

13. Globalization refers to:

a)  Lower incomes worldwide

b) Less foreign trade and investment

c) Global warming and their effects

d) A more integrated and interdependent world

Answer: d

14. Which of the following is not a force in the Porter Five Forces model?
a. Buyers

b. Suppliers

c. Complementary products    
d. Industry rivalry

Answer:c

15. Comparative Cost Trade Theory is given by

a. Adam Smith

b. David Ricardo

c. Gottfried Haberler

d. Heckscher Ohlin

Answer: b

16. …….is the payment method most often used in International Trade which offers
the exporter best assurance of being paid for the products sold internationally.
a. Bill of Lading

b. Letter of Credit

c. Open Account

d. Drafts

Answer: b

17. Key controllable factors in global marketing are:

a. Government policy and legislation

b. social and technical changes

c. marketing activities and plans

d. all of the above.

Answer: c

18. Select example of Indian Multinational Company

a. Hindusthan Unilever

b. Videocon

c. Cargill

d. Tesco

Answer:b

Multinational Corporations
19. …………………corporation produces in home country or in a single country and
focuses on marketing these products globally or vice a versa.
a. Global

b. International

c. Transnational

d. None of the above

Ans: a

20. —————-comapny produces, markets, invests and operates across the world
a. Global

b. International

c. Transnational

d. Multinational

Ans: c

21. …..is only a legal agreementand it is not an institution, but ….. is a permanent
institution.
a. GATT, WTO

b. WTO, GATT

c.WTO, IMF

d. IMF, GATT
ans: a

22. The WTO was established to implement the final act of Uruguay Round agreement
of ……
a. MFA

b. GATT

c. TRIP’s

d. UNO

Ans: GATT

23. WTO stands for

a. World technology association

b. World time organization

c. World trade organization

d. World tourism organization

Ans: c

24. NAFTA stands for

a. North African trade association

b. North American free trade agreement

c. Northern Atlantic trade agreement

d. Northern association for trade

Ans: b

25. IPR stands for

a. Intellectual property rights

b. International property rights

c. Internal promotion rights

d. Interior promotional rights

Ans: a
26. The main promoter of trade liberalization was
a. GATT

b. NAFTA

c. CEPTA

d. CISA

Ans. a. GATT

27. MNC Stands for

a. Multi National Coopertion

b. Multi National Corporation

c. Multi Nation Company

d. Multi National Collaboration

Ans: b

28. _______ is the first step in the internationalization process.

a. License

b. Foreign Investment

c. Sales

d. Export

Answer: a

29. SMEs stands for:

a. Small and Medium Entrepreuners

b. Small Management of Enterprises

c. Small and Medium-sized Enterprises.

d. Societies for Managing Exports

Answer: c

30. The OECD stands for:

a. Organization for Economic Co-operation and Development
b. Organization for Economic Coordination and Development

c. Organization for Environmental Cooperation and Development.

d. Organization for Environmental Control and Development

Answer: a

31. On the basis of the size and composition of external debt, world bank has classified India
as a 

A heavily indebted country

.
B moderate indebted country
.
C Less indebted country
.
D Severely indebted country
.
Answer: B
32. The balance of payments of a country on current account is equal to
A Balance of trade plus short term
.
B Balance of trade plus net invisible exports
.
C Balance of payment minus capital flows
.
D Balance of invisible trade plus imports
.
B
33. De-coupling' denotes.
A Indian market may be cutt off from global markets so that it may be affected by global
. volatility.
B Separating the birds affected by bird flue.
.
C that markets are independent.
.
D None of the above.
.
A
34. NAFTA is an example of
A Common Market
.
B Customers Union
.
C Economic Community
 .

D Free Trade Area

.
D
35. Which one is not an international organisation
A SAARC
.
B ASEM
.
C ASEAN
.
D CBDT
.
D
36. The main objective of International Monetary Fund (IMF) was to
A Promote International trade
.
B Help economically backward countries
.
C Maintain stable exchange rates
.
D Promote international liquidity
.
B
37. Which of the following is not an International Financial Institution
A ICICI
.
B IMF
.
C IDA
.
D World Bank
.
A
38. The gains from two nations depend on
A Domestic barter rates
.
B Different in the domestic barter rates of the two countries
.
C Terms of trade
.
D Degree of absolute advantage.
.
C
39. Interest payments on loans borrowed abroad are recorded in
A Capital Account
.
B Current Accounts
.
C Errors and Omission Section
.
D Official Reserve Account
.
B
40.  In balance of payment accounts, all goods exported and imported are recorded in
A Capital account
.
B Visible Accounts
.
C Invisible Account
.
D Merchandise Accounts
.
B
41. Which of the country's banking have been brought under 'Sanctions by USA, recently"?
A Iraq
.
B North Korea
.
C Pakistan
.
D Iran
.
D
42. Statement :
(i) No gain from trade is shared between countries in accordance with their relative strength
of demand.
(ii) The terms of trade are against the primary producer unless it has a monopoly or the
product has on inelastic demand abroad.
A Both correct
.
B Both incorrect
.
C I corret, II incorrect
.
D I incorrect II correct
.
D
43. Out of the following, one is not related with WTO
A TRIPS
.
B Ministerial Conference
.
C TRIMS
.
D TRAI
.
D
44.
The balance of payments account is conventionally divided into

A Current Account and Capital Account

.
B Visible Account and Invisible Account
.
C Long-term capital Account and short term capital account 
.
D None of the above
.
A
45. Which one of the following theories says that "to export was good and to be encouraged
but to import was bad and to the discouraged."

A Comparative cost theory

.
B The theory of Absolute Advantage
.
C Factor Endowment theory
.
D Mercantilist theory
.
D
46. A letter of credits means
A A bank agreeing to accept and pay on due date
.
B A letter containing conditions of credit purchase or sale
.
C A letter sent by exporter to importer sanctioning credit dial.
.
D A letter sent by importer to exporter sanctioning credit deal
.
A
47. Which of the following is a discontent of the of the title of sale of goods
A certificate of origin
 .

B Letter of credit
.
C Bill of lending
.
D Bill of entry
.
C
48. The double Taxation Avoidance convention (DTAC) part was signed between
A India and China
.
B India, Serbia and Montenegro
.
C Australia and china
.
D None of the above.
.
B
49.  
If a country has deficit in balance of current account balance of capital account will be
A zero
.
B surplus
.
C Deficit
.
D None of the above
.
B
50. Physical delivery of foreign exchange has to lake place in case of
A Forward Market
.
B Spot market
.
C Future market
.
D Options market
.
B
51. he amount of gold, reserve curriencies and special drawing rights available for the
finance of international trade is known as

A International liquidity
.
 B Special Drawing Right
.
C International Monetary Fund
.
D None of the above
.
A
Chapter 1
Multiple choice
1. An international business is a business whose activities involve crossing national borders.
2. The major globalization drivers include all of the following except: social
3. Due to the expanding importance of foreign-owned firms in local economies, host
governments have made their policies toward these companies more liberal
4. Management has no direct control over the external environment of the firm but can exert
influence by heavy promotion of new products to change cultural attitudes
5. Unconscious reference to one's own cultural values when judging behavioral actions of others
in a new and different environment is called: self-reference criterion.