True or False

Q.1 The pattern of 1947 simply reflects the high productivity of capital in the US and its
abundance.

Q.2 which of the following does not apply in the case the IPTLC
1. HIC shifts production to LIC in the later stage
2. HIC shifts production to LIC in the early stage
3. LIC shifts production to HIC in the later stage
4. None of them

Q.3 Which of the following option does not belong to the theory of absolute cost advantage
1. two countries
2. two commodities
3. labor and capital as factor of production
4. none of them

Q.4 Which of the following is applicable to absolute cost advantage theory

1. one country is more efficient in one comm
2. one country is more efficient in both comm
3. other country is more efficient in both comm
4. All of them

Q.5 If BI in chemicals in China 0.42 and in US it is 1.18, what would advise to China and USA

1. US should import to China

2. China should export from USA
3. Both
4. Neither 1 nor 2

Q.6 which of the following statement does not represent the Leontief Paradox:

1) Capital intensive country should export capital intensive goods,

2) Capital intensive country should export labor intensive goods,
3) Either '1' or '2’,
4) Neither '1' nor '2'

Q.7 which of the following statement does not represent the HO Theory:

1) Capital intensive country should export capital intensive goods,

2) Capital intensive country should export labor intensive goods,
3) Either '1' or '2’,
4) Neither '1' nor '2'

Q.8 IPLC Theory, Under Standardized Product stage

1) Consumption is more than production in HIC
 2) Consumption is more than production in MIC
3) Consumption is more than production in LIC
4) All of them
Q.9 Leontiff found
1) Similar to HO's observation
2) just opposite to HO
3) Either '1' or '2'
4) None of them

Q.10 Low Base effect presents (which of the foll does not belong to this concept)

1) True economic picture

2) Experienced during post pandemic
3) Rare Phenomena
4) high growth due to high performance in the base year

Q.11 Which one of the following does not represent the character of the Growth stage

1) Mass Production
2) Price Competition begin
3) Few Competitors
4) Increased exports to high income countries
Q.12 If TOT of Italy in 2020 was 105.86, it means that
1) Favourable TOT
2) Rate of export prices > rate of import prices
3) Rate of change in export prices > rate of change in import prices
4) Option ‘1’ and ‘3’ both

Q. 13 If the rate of change of the index of ex prices is less than the rate of change of
Index of Im prices,
1) TOT will be favourable
2) TOT will be unfavourable
3) No effect on TOT
4) Either ‘1’ or ‘2’
Q.14 the demand of exports of a country is elastic it means that
1) TOT will be unaffected
2) TOT will not be in its favour
3) TOT will be in its favour
4) All the above

Q.15 $ 1 = Rs 25.00 - 24.50. If bank has this quote which condition will be applicable:
1. Direct Quote
2. Buy Low Sell High
3. Buy High Sell Low
4. Option 1 and 2 both
Q.16 Rs 100 = $ 5.00 -5.1280. If bank has this quote which condition will be applicable:
1. Direct Quote
2. Indirect Quote
3. Buy High Sell Low
4. Option 1 and 2 both
Q.17 The Pattern of 1947 simply reflects the high productivity of capital in the USA and its
abundance.
Q.18 there is only one factor that determines the trade patterns.
Q.19 which of the following does not apply in the case of IPTLC
1. HIC shifts production to LIC in the later stage
2. HIC shifts production to LIC in the early stage
3. LIC shifts production to HIC in the later stage
4. None of them
Q.20 Which of the following is applicable to absolute cost advantage theory
1. One country is more efficient in one commodity
2. One country is more efficient in both commodity
3. Other country is more efficient in both commodity
4. All of them
Q.21 The principle of commodity terms of trade is based on export and import prices indices. Such type
of terms of trade called:
1. Net Barter Terms of Trade
2. Gross Barter Terms of Trade
3. Income Terms of Trade
4. Two Factoral Terms of Trade
Q.22 The given statement, “Economies of scope assist in achieving economies of scale by expanding into
the international markets” belongs to the theory:
1. Factor endowment theory
2. Comparative cost Advantage theory
3. International Product Life Cycle Theory
4. Leontiff Paradox
Q.23 Which of the following statement is not true with respect to Balassa Index
1. Tool to measure Revealed Comparative Advantage
2. It Measures the Relative Trade Performance Of Individual Countries in Particular
Commodities
3. Ignores full employment conditions
4. All of them

Q.24 Which import commodity in India showed maximum increase in January 2021
1. Petroleum Products
2. Gold
3. Transport equipment
4. Iron Ore
Q. 25 If BI in chemicals in China 1.18 and in US it is 0.42, what would advise to China and USA
1. US should import from China
2. China should export to USA
3. Both
4. Neither 1 nor 2
Q.26 Which of the following statement does not represent the Leontief Paradox:
1. Capital intensive country should export capital intensive goods,
2. Capital intensive country should export labor intensive goods,
3. Either '1' or '2’,
4. Neither '1' nor '2'
Q. 27 The gold standard in which the currency in circulation consists of paper notes but a fixed weight of
gold remains the basis of money is called:
1. Gold Specie Standard
2. Gold Bullion Standard
3. Gold Exchange Standard
4. None of them

Q.28 A currency is pegged to a single currency or a basket of currencies but the leg is periodically
adjusted with a range of less than 2 percent in response to changes in selective macro-economic indicators
is called:
1. Crowling Peg
2. Soft Peg
3. Hard
4. Crowling Bands
Q.29 Theory States the rate of exchange is determined by the forces of demand and supply for the
currency in the foreign exchange market is called:
1. Mint Par Theory
2. Purchasing Par Parity Theory
3. Balance of Payment Theory
4. Fisher Effect Theory
Q.30 Which of the following is applicable to comparative cost advantage theory
1. One country is more efficient in one commodity
2. One country is more efficient in both commodity
3. Other country is more efficient in both commodity
4. All of them

Q31 “Why does a nation achieve international success in a particular industry?” This statement refers to
which of the following international trade theories:
1. Factor endowment theory
2. Comparative cost Advantage theory
3. International Product Life Cycle Theory
4. Porter’s Five Forces Model
Q.32 “Why does a nation achieve international success in a particular industry?” This statement refers to
which of the following international trade theories:
1. Factor endowment theory
2. Comparative cost Advantage theory
3. International Product Life Cycle Theory
4. Porter’s Five Forces Model

Q.33 Which of the following statement is true with respect to Balassa Index
1. Tool to measure Revealed Comparative Advantage
2. It Measures the Relative Trade Performance Of Individual Countries in Particular
Commodities
3. Ignores attainment of economic efficiency
4. All of them
Q.34 Which export commodity in India showed maximum fall in January 2021
5. Petroleum Products
6. Transport equipment
7. Iron Ore
8. Gold
Q.35 If BI in chemicals in China 0.42 and in US it is 1.18, what would advise to China and USA
9. a. US should import to China
10. b. China should export from USA
11. c. Both
12. d. Neither 1 nor 2
Q.36 A country will have comparative advantage in and should therefore export that good whose
production is relatively intensive in the factor with which that country is relatively well endowed. Identify
the applicable International Trade Theory from the following options:
1. Absolute Cost Advantage Theory
2. Comparative Cost Advantage Theory
3. Leontiff Paradox
4. Heckscher-Ohlin Theory
Q.37 If the terms of trade 115, and 90 respectively, it means that the terms of trade
1. Favorable and unfavorable respectively
2. Unfavorable and favorable respectively
3. Either ‘1’ or ‘2’
4. Neither ‘1’ nor ‘2’
Q.38 Which one of the following does not represent the character of the Growth stage under Product life
cycle theory
1. Mass Production
2. Price Competition begin
3. Few Competitors
4. Increased export to high income countries
Q.39 Which export commodity in India showed maximum rise in January 2021 in comparison to January
2020
1. Petroleum Products
2. Drugs and Pharmaceuticals
3. Engineering Goods
4. Iron Ore

Q.40 If BI of Clothing in India 3.09 and in China it is 3.46, it means that

1. China is less competent than India
2. India is less competent than China
3. China is more competent than India
4. Option ‘b’ and ‘c’ both
Q. 41 From HO theorem, Leontif expected that
1. The US would export capital-intensive goods and import labor-intensive goods
2. The US would export labour-intensive goods and import capital-intensive goods
3. The US would deal with capital-intensive goods only
4. The US would deal with labour-intensive goods only

An Ebix Group initiative, EbixCash is emerging as the airport of financial transactions in India. With
a ‘Phygital’ strategy (physical experience with digital backend) that combines more than 3,20,000
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India’s largest end-to-end financial exchange today, conducting in excess of $18 Billion in GMV with
a product diversity that expanses B2C distribution, B2B, back end systems ensuring leadership in
digital payments solutions, money transfer services (domestic & international), travel, insurance and
corporate & incentive solutions.

EbixCash initiated and pioneered the concept of ‘digital cash’ to the Indian consumer and various
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Our inward remittance business in India conducts in excess of $6.5 Billion (70% of India’s cash to
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EbixCash’s investments in asset-light technology start-ups like Routier and AHA taxis have positioned
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Our travel portfolio is also one of Southeast Asia’s leading travel exchange with over 2,200+
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estimated $ 4 Billion in gross merchandise value per year.

EbixCash has inked a Joint venture with BSE for insurance related services (received IRDA approval
to sell insurance through not only traditional agents but also through mom and pop shops at the last
mile on 8.5 inch devices, self-certification) and then power, backend technology for insurance
companies and brokers in terms of claims, policy administration, underwriting, multi-quoting,
compliance, order-entry, binding of policy, signature, reinsurance etc. (Ebix is already the world’s
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EbixCash’s Ask a doctor provides the most comprehensive source of interactive, consistent, and
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EbixCash’s SmartClass E-learning venture with more than 70,000 content classrooms is one of India’s
fastest-growing and leading E-learning companies.

Q.42 Analyze the overall competitive advantage of Ebixcash using Five Force Model.

Q.43 Conduct a SWOT Analysis and provide strategic solutions.

Bombay on London is quoted as under:

Spot $ 4.1430 $ 4.1475
1 month forward 2.0 1.5 pm

Q.44 Calculate 1 month, 2 months and 3 months forward rates.

Q.45 Netflix is a US-based internet streaming media provider founded by Reed Hastings and Marc
Randolph in 1997. It originally started with providing DVD-by-mail service in North America and
now provides digital streaming with services available worldwide. Although Netflix is the most
popular online subscription service for streaming entertainment in the world, there are some issues
which threaten the long-term viability of their business model. Assess the Netflix using Porter’s Five
Forces Model to determine how market forces may affect the company’s business.

Q. 46 Critically analyze fixed and floating Exchange Rate Systems.

Q. 47 Explain the concept of currency depreciation and devaluation. If INR fell 0.59 % in comparison
to USD on November 17, 2021. Can this phenomenon be classified as devaluation? Give Reasons.
Also, discuss the situations in which currency value can be appreciated.

Q. 48 Explain Purchasing Power Parity Theory. How this theory is an improvement over mint par
theory? As you know that McDonald is using Big Mac Index for measuring international parity of
McDonald’s products. Explain Big Mac Index and calculate Big Mac Index from the following
information:
Big Mac Price in Local Currency = 12.5 Chinese Yuan
Big Mac Prices in US Dollar = 3.57
Implied PPP of USD = 3.50
Actual dollar exchange rate = 6.83

Q.49 Critically analyze Pegged Exchange Rate System.

Q.50 Explain the concept of currency depreciation and devaluation. In what situations currency
depreciation or appreciation will take place in the market and what will be its implications? Discuss
with the help of an hypothetical situation.

Q.51 India's Income Terms of Trade (TOT) = 129, Net TOT = 79, Gross TOT = 87. How will you
interpret them?
Q.52 Identify top three commodity groups (in terms of top increase and decrease) of India’s Trade
Composition of 2020 & 2021.
Q.53 Discuss the concept of Balassa Index. Japan has zero Balassa Index in Clothing. What does it
mean?
Q.54 Explain the rationale of maxim Buy High, Sell Low with respect to foreign exchange forward
rate determination.

Q.55 Which is the most prevailing currency in the world and what is it percentage?

Q. 56 If $ 1 = Rs. 74.20 – Rs. 74.23, discuss the concept of Bid, offer and spread in the quote.
Q.57 McDonald’s Corporation expands internationally through strategies that account for the external
factors in the industry environment. Assess the identifiable Five Forces of the business with the help
of Porter’s model.

Q.58 Which of the following is not Factors Influencing Terms of Trade ?

1. Elasticity of supply
2. No. of Firms in Market
3. Correct Size of population
4. Devaluation
Q. 59 Which of the following is correct in context of stages of International Product Life-Cycle ?
1. "Introduction, Growth, Maturity, Decline"
2. "Growth , Introduction, Maturity, Decline"
3. 3. "Introduction, Growth, Decline, Maturity"
4. 4. "Maturity, Introduction, Growth, Decline”
Q. 60 Who discovered International Product Life-Cycle Theory ?
1. Adam Smith
2. David Ricardo
3. Raymond Vernon
4. Ohlin
Q. 61 Leontief Paradox contradicted which theory ?
1. Theory of Comparative Advantages
2. Heckscher-Ohlin
3. Theory of Absolute Advantages
4. none of the above
Q. 62 "Who discovered The Leontief Paradox, 1953 ?"
1. Adam Smith
2. David Ricardo
3. Heckscher Leontief
4. Wassily Leontief
Q. 63 Which one is not the Factor contributing to the changes in the Revealed comparative advantages
of a country ?
1. Economics Factors
2. Structural changes
3. Trade Specialization
4. Commodity's price increases
Q. 64 "Which Theory says ""Trade is a positive-sum game"" ?"
1. Theory of Absolute Advantage
2. Heckscher 1919
3. Theory of Comparative Advantage
4. Balassa Index
Q. 65 Who introduced Theory of Absolute Advantages ?
1. Adam Smith
2. David Ricardo
3. Heckscher
4. Ohlin
Q.66 Which among is not the assumption of Theory of Absolute Advantage
1. "Freedom of enterprise and freedom of commerce."
2. No government intervention
3. Developing countries are given rebate in international trade
 4. Laissez faire
Q.67 Which statement is true in context of Mercantilism ?
1. "Maximize exports through subsidies. Minimize imports through tariffs and quotas."
2. "Minimum exports through subsidies. Maximum imports through tariffs and quotas."
3. "Maximize exports through subsidies. Maximum imports through tariffs and quotas."
4. None of the above

Q. 68 Pegged Exchange Rate System means

1. Pegging value of home currency to a foreign currency or a basket of currency. Correct
2. Pegging value of a foreign currency to home currency or a basket of currency Incorrect
3. Pegging value of a foreign basket of currency
4. Pegging value of a basket of home currency

Q. 69 Peg within horizontal bands means

1. Currencies generally not allowed to fluctuate beyond +/- 1 per cent of the parity
2. Currencies generally allowed to fluctuate beyond +/- 1 per cent of the central parity
3. Currencies generally not allowed to fluctuate beyond +/- 1 per cent of the central parity
4. Currencies generally not allowed to fluctuate beyond +/- 2 per cent of the central parity

Q. 70 Which statement does not belong to Mint Parity Theroy

1. The limit is determined by the cost of export.
2. This theory is valid only where the countries are on gold standard.
3. Actual rate of exchange in the market may differ from mint par rate beyond a well defined limit
4. All of them
Q. 71 "the rate of exchange is determined by the forces of demand and supply for the currency in the
foreign exchange,market. This statement holds true, with reference to which theory"
1. PPP Theory
2. Fisher Effect Theory
3. Mint Parity Theory
4. BOP Theory
Q. 72 Where the unit of foreign currency is kept constant and price variation is reflected in the units of
home currency is known as
1. Idirect or foreign currency quotation
2. Direct or home currency quotation.
3. Neither Direct nor indirect
4. Direct and Indirect

Q. 73 The rate at which the bank is willing to buy is known as the ------- rate and the rate at which it is
willing to sell is known as the---------rate. Choose the right option to fill in the blanks given in the
question.
1. Offer and Bid
2. Offer and Offer
3. Bid and Bid
4. Bid and Offer
Q.74 "When an investor invest in the foreign country, the foreign currency"
1. Appreciates
2. Depreciate
3. Revaluate
 4. Devaluate

Q.75 In ‘Direct rate’ premium is -------- to both the buying and selling rate whereas discount is -------
--. Choose the right option to fill in the blanks given in the question.
1. Added only
2. Deducted Only
3. Added and Deducted Respectively
4. Deducted and Added Respectively

Q. 76 In ‘Indirect rate’ premium is ---------- and discount is -------- to the buying and selling rates.
Choose the right option to fill in the blanks given in the question.
1. Added and Deducted Respectively
2. Added only
3. Deducted Only
4. Deducted and Added Respectively

Q. 77 Maxim 'Buy High; Sell Low' is applicable in:

1. Direct Quotation
2. Indirect Quotation
3. Either Indirect or Direct Quote
4. Direct and Indirect Both

Q. 78 Tell us a story on international trade theories developed by Adam Smith, Ricardo, Hechksher
Ohlin to Leontief. Recently, US decided to raise tariffs on at least $ 50 Bn Chinese Imports. This move
is a warning to both India and China. Analyse the given scenario and suggest the way forward to India
with the help of theoretical understanding of International Trade theories.

Q. 79 Illustrate the concept of Commodity Terms of Trade and Income Terms of Trade. A base period
index of export and import price is 100. Thus, TOT for the base year is 100. Suppose, export price
index rises to 140 and import price index rises to 110. What will be the TOT and its interpretation?