International business management multiple choice questions and

answers

1. ___ has grown to be one of the most important features of the world’s economy.
a. International Business
b. Globalization
c. Liberalization
d. All of the above
Ans: A

2. Many US information technology companies are turning to International locations

to remain-
a. Leader
b. Competitor
c. Stable
d. Master
Ans: B

3. Salaries and fringe costs for well-trained software engineers in Northern Ireland
approximately ___ lower than costs for US engineers.
a. 50%
b. 80%
c. 47%
d. 69%
Ans: A

4. ___ is a process that is beneficial – a key to future world economic development-

and also inevitable and irreversible.
a. Privatization
b. Globalization
c. Liberalization
d. Economist
Ans: B

5. Economic globalization is a historical process, the result of ___.

a. Human innovation
b. Technological Progress
c. Both a and b
d. Knowledge
Ans: C

6. True/False:
‘Globalization means that world trade and financial markets are becoming more
integrated.’
a. True
b. False
c. Incomplete
d. Can’t say
Ans: A

7. ___ is at least as important for long-term development as financial transfers.

a. Economic stability
b. Institution building
c. Structural reform
d. All of the above
Ans: D

8. Supporters of democratic globalization are sometimes called

a. Globalists
b. Pro-globalists
c. Libertarians
d. None of the above
Ans: B

9. ___ has made great advances in areas such as Bangladesh through economically
liberating and empowering women with jobs.
a. Democratic
b. Feminism
c. Globalization
d. Liberalization
Ans: B

10. In 2002, ___ was the third-largest exporter of cultural goods, after the UK and the
US.
a. China
b. India
c. Kuwait
d. Korea
Ans: A

11. ___ Companies are registered in one country, doing business in others.
a. Transnational
b. Multinational
c. Off-shore
d. International
Ans: C

12. The difference between interest rates in Russia and Switzerland stands for about
___ per annum.
a. 10%
b. 5%
c. 28%
d. 40%
Ans: B
13. Globalization refers to a growing economic interdependence among countries, as
reflected in the increased cross-border flow of :
a. goods & services
b. capital
c. know-how
d. World economy
e. All of the above
Ans: E

14. It refers to the assumptions, values, and practices of people in the West and some
elites in Non-Western cultures.
a. Universal Culture
b. Global culture
c. Organizational culture
d. All of the above
Ans: A

15. ___ means the high adaptation of managerial practices to a given culture, and,
therefore, high effectiveness.
a. Fitness for use
b. High fit
c. Fit and Fine
d. Substitution
Ans: B

16. Erez and Gati proposed that the general model of multi-level analysis could be
adopted for understanding the dynamics of ___.
a. Culture
b. Cultural Change
c. Multi-Level analysis
d. Both a and b
Ans: D

17. State whether it is true or not:

“Around the World, wherever you are, get what you want-fast from our family of Web
sites.”
a. False
b. True
c. Incomplete
d. Cannot say
Ans: B

18. ___ has become a world-leading marketer of toys.

a. California
b. UAE
c. Japan
d. China
Ans: A

19. The main benefits for industrial countries would come from the liberalization of
their ___ market.
a. Mine
b. Agriculture
c. Domestic
d. National
And: B

20. The non-tariff barriers are:

a. Product standards
b. Proliferation
c. Both a and b
d. Product adaptation
Ans: C

21. The ___ step in determining your license requirements is to classify your product
using the Commerce Control List (CCL).
a. First
b. Second
c. Third
d. Last
Ans: A

22. Life Cycle Theory has been used since the ___ to describe the behaviour of a
product or service from design to obsolescence.
a. 1986
b. 1970
c. 1982
d. 1975
Ans: B

23. Here the firm may continue to market the product hoping that competitors will
discontinue their products.
a. Maturity stage
b. Growing Stage
c. Decline Stage
d. Saturation Stage
Ans: C

24. ___ specify the type of system, equipment, tooling, layout, and flow used in
manufacturing or service operations.
a. Process engineering
b. Design engineering
c. Life cycle engineering
d. All of the above
Ans: A

25. ___ claims that knowledge is being applied faster, resulting in increasing levels of
new product introductions.
a. Slater (1993)
b. Bayus (1994)
c. Vesey (1992)
d. None of the above
Ans: B

26. The five-element product wave, or FPW, uses trigger points, rather than ___, as the
horizon over which the element curves vary.
a. Cost
b. Price
c. Time
d. All of the above
Ans: C

27. A financial services deal covering more than 95% of trade in banking and ___.
a. Insurance
b. Securities
c. Financial Information
d. All of the above
Ans: D

28. The seeds of the Uruguay Round were sown in ___, at the Ministerial Meeting of
GATT members in Geneva.
a. November 1982
b. January 1970
c. March 2005
d. July 1985
Ans: A

29. Numerous specialized ___ reports to the General Council.

a. Committees
b. Working groups
c. Working parties
d. All of the above
Ans: D

30. Day-to-day work in between the ministerial conferences is handled by:

a. The General Council
b. The Dispute Settlement Body
c. The Trade Policy Review Body
d. All of the above
Ans: D
31. TRIPS Council is for:
a. Goods Council
b. The council for trade-related aspects of Intellectual Property Rights
c. Services Council
d. Both a and c
Ans: B

32. ___ Subsidiary bodies deal with financial services, domestic regulations, GATS rules
and specific commitments.
a. Goods Council
b. The council for trade-related aspects of Intellectual Property Rights
c. Services Council
d. Both a and c
Ans: A

33. An Industry composed of a limited number of large firms.

a. OECD
b. Oligopoly
c. MNE
d. MAI
Ans: B

34. MITI is the ___ Ministry of International Trade and Industry.

a. Japan
b. China
c. India
d. American
Ans: A

35. Maastricht Treaty ratified in

a. January 1991
b. January 1994
c. January 1995
d. January 1992
Ans: B

36. Products adapted to the perceived unique characteristics of the national market.
a. Local Products
b. International Products
c. Multinational Products
d. Global products
Ans: C

37. ___ in Seller’s country forwards a letter of credit to Seller informing about the terms
and conditions of credit.
a. Advising Bank
b. Service Bank
c. Advisory Commission
d. None of the above
Ans: A

38. The term ___ is also used in the RO/RO (roll-on/roll-off) services.
a. FOB
b. FCA
c. FAS
d. EXW
Ans: B

39. A commonly used measure of inequality is the ___ coefficient for income, which
takes on values between zero and one, a value of zero would indicate perfect equality
of incomes.
a. Transition
b. Transmission
c. Gini
d. Labor earning coefficient
Ans: C

40. UNCITRAL texts are initiated, drafted, and adopted by the ___ on International
Trade Law.
a. United States Commission
b. United Nations Commission
c. G-20 Group
d. None of the above
Ans: B

41. The IMR Company also operates two separate software development plants in ___
and ___, India.
a. Bangalore, Delhi
b. Delhi, Mumbai
c. Bangalore, Mumbai
d. All of the above
Ans: C

42. Globalization refers to the movement of (people), ___ and (knowledge) ___, across
International borders.
a. Labor, Technology
b. Human innovation, Technological progress
c. Easier, quicker
d. Financial, Competition
Ans: A

43. Growth in living standards springs from the accumulation of physical (capital) ___
and (human capital) ___, and through advances in technology.
a. Productivity, labour
b. Investment, labour
c. Investment, Productivity
d. All of the above
Ans: B

44. Government Policy should focus on the ___ important areas:

a. Educational and vocational training, to make sure that workers have the opportunity
to acquire the right skills in dynamic changing economies.
b. Well-targeted social safety nets to assist people who are displaced.
c. Both a and b
d. Capital, Investment
Ans: C

45. Globalization as the beneficial spread of ___ and ___.

a. Liberty, Capitalism
b. Society, Economy
c. Both a and b
d. Capitalism, the economy
Ans: A

46. The ___ are likely to work for a single Company for a lifetime, moreover, to work
overtime and favor their chief with great respect but the ___ employees change jobs
quite more often.
a. Japanese, US
b. Japanese, Britain
c. Both a and b
d. None of the above
Ans: C

47. ___ and ___ are increasing in organizations today because of changing
demographics, the desire by organizations to improve their workforce, legal pressures
& increased globalization.
a. Diversity, Multiculturalism
b. Variety, Diversity
c. Variation, Diversification
d. All of the above
Ans: A

48. The ___ ideology suggests that each cultural group loses some of its dominant
characteristics in order to become the mainstream.
a. Multiculturalism
b. Melting Pot
c. Universal culture
d. Magna Mac
Ans: B
49. The assumption of cultural stability is valid as long as there are no ___ changes that
precipitate adaptation and ___.
a. Environmental changes, Cultural Changes
b. Management, Organizational changes
c. Organizational changes, Cultural changes
d. None of the above
Ans: A

50. ___ Approach, viewing culture as a multi-level construct that consists of various
levels nested within each other from the most ___ of global culture, through national
cultures, group cultures.
a. Micro-level, micro-layer
b. Multi-level, macro-level
c. Multi-level, multi-layer
d. Both a and c
Ans: B

51. Both ___ and ___ processes reflect the dynamic nature of culture.
a. Top-down, Bottom-up
b. Upward, Downward
c. Vertical, horizontal
d. None of the above
Ans: A

52. A recent study by Erez and Gati (2004) examined the effects of various factors on
the change process and its outcomes:
a. The cultural value of individualism-collectivism
b. The reward structure and its congruence with the underlying cultural values
c. The degree of ambiguity in the reward structure
d. All of the above
Ans: D

53. Policies that make an economy open to ___ and ___ with the rest of the world are
needed for sustained economic growth.
a. Trade, Investment
b. Trade, labor
c. Capital, Investment
d. Capital, labor
Ans: A

54. The failure to start a new round of multilateral trade negotiations at the WTO
conference in ___ in ___ was a setback for the international trading system.
a. US, 1997
b. Seattle, 1999
c. China, 2005
d. Africa, 1998
Ans: B
55. The ___ and ___ have allowed globalization outsourcers to develop new models for
process-rich, cost-effective repeatable globalization methodology.
a. Internet, technology
b. Internet, intranet
c. Internet, Global communications
d. Internet, Electronic media
Ans: C

56. Intellectual property rights refer to the legal system that protects:
1. Patents
2. Trademarks
3. Copyrights
4. Trade secrets
a. 1, 3, 4
b. 1, 2, 3
c. 2, 3, 4
d. 1, 2, 3, 4
Ans: D

57. The duration of each stage of the cycle varies with the ___ and the type of ___
supporting it.
a. Product, management
b. Product, Customer
c. Product, market
d. Product, location
Ans: A

58. ___, in which the good or service is taken from concept and detail design to
prototyping. Whereas in ___, technologies and production methods are evaluated as a
system is set into motion.
a. Product engineering, Design engineering
b. Design engineering, Process engineering
c. Product engineering, Process engineering
d. All of the above
Ans: B

59. Hecksher-Ohlin Model draws a sharp distinction between ___ and ___ factor
mobility.
a. Internal, external
b. Domestic, external
c. Organizational, external
d. Initial, final
Ans: B

60. CRS (Constant Returns to Scale):

a. y = F(L, K) then y’ = F ( 2L, 2K) = 2y
b. y = F (K, L) then y’ = F ( 2K, 2L)=y
c. y’ = F (L, M) then y = F ( 2L, 2M)
d. None of the above
Ans: A

2ND

MULTI CHOICE QUESTIONS

INTERNATIONAL BUSINESS
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

3RD

1. Computer programs are protected as :

A. Copyrights

B. Trade marks

C. Patents.
D. none

Discussion
A. Copyrights
2. Geographical indication specifies:
A. Place of origin of goods only

B. Special characteristics of product associated with place of origin.

C. Both (a) and (b)

D. none

Discussion
C. Both (a) and (b)

3. Strategic alliance cannot be between:

A. Manufacturer and supplier

B. Competitors

C. Non- competitors

D. None of the above

Discussion
D. None of the above

4. The mode of entry into international business

with least risk to the firm is :
A. Indirect exports

B. Direct exports

C. Management contract

D. Contract Manufacturing

Discussion
A. Indirect exports
5. The following is an export intermediary:
A. Export house
B. Trading house

C. A manufacturing exporter

D. Merchant exporter.

Discussion
C. A manufacturing exporter
6. A global company can----------- its
experience to expand its global operations
A. Contract

B. Expand

C. Minimize

D. Leverage

Discussion
D. Leverage
7. Governmental regulations can affect the
viability & ----------- of a company using the
internet as a foreign market entry mode.
A. effectiveness

B. association

C. performance

D. None of the above

Discussion
A. effectiveness
8. ______ typically offer more flexibility in
international markets
A. SMEs

B. LSEs

C. MNEs
D. None of the above

Discussion
A. SMEs
9. From the point of view of marketing, an
organization that enjoys competitive advantage
in an
industry has done so by:
A. Focusing on long-term profit.

B. Charging lower prices than competition.

C. Creating superior value for customers.

D. Constantly enlarging its marketing activities.

Discussion
C. Creating superior value for customers.

10. Regionalism is:

A. An international management orientation and a protectionist
policy created to exclude third world countries from certain forms of
international trade.

B. The grouping of countries into regional clusters based on geographic

proximity.

C. A protectionist policy created to exclude third world countries from

certain forms of international trade.

D. An international management orientation.

Discussion
B. The grouping of countries into regional clusters based on geographic
proximity.

11. Which one of the following is a pull factor

in emigration?
A. Political oppression
B. Job opportunities

C. Food shortages

D. War

Discussion
B. Job opportunities
12. Which of the following do NOT facilitate
globalization?
A. Improvements in communications

B. Barriers to trade and investment

C. Immigration controls

D. Removal of controls on movement of capital across borders

Discussion
B. Barriers to trade and investment
13. Which of the following is not a driver of
globalization?
A. The fragmentation of consumer tastes between countries.

B. The competitive process.

C. Multinational companies successfully persuading governments to

lower trading barriers.

D. The need to gain economies of scale.

Discussion
A. The fragmentation of consumer tastes between countries.
14. Globalization is beneficial for firms
because:
A. It protects them against foreign competition.

B. It cushions them from the effects of events in other countries.

C. It opens up new market opportunities.

D. It increases the risk and uncertainty of operating in a globalizing
world economy.

Discussion
C. It opens up new market opportunities.

15. The internet facilitates globalization by:

A. Making it more difficult to contact potential customers abroad.

B. Cutting the cost for firms of communicating across borders.

C. Making it harder to send money from one country to another.

D. Making it easier for governments to censor the information

received by their citizens from abroad.

Discussion
B. Cutting the cost for firms of communicating across borders.
16. Globalization can create problems for
business because:
A. It can result in more competition.

B. It increases vulnerability to political risk and uncertainty when

operating abroad.

C. It means that they can increase prices.

D. All of the options given are correct.

Discussion
A. It can result in more competition.

17. How does international law facilitate

international trade and investment?
A. It makes it easier to resolve contract disputes for firms involved in
international trade and investment.

B. It allows business to choose the most favorable national legal system

to institute proceedings.
C. The terms used in international conventions are open to differing
interpretations.

D. The Uniform Commercial Code favors big US multinationals.

Discussion
A. It makes it easier to resolve contract disputes for firms involved in
international trade and investment.
18. Laws relating to The Single Market Program
allow EU-based companies to:
A. Move goods and services from any member state to another.

B. Transfer managers to any member state.

C. Invest anywhere in the EU.

D. All of the options given.

Discussion
D. All of the options given.
19. Competition Law in the EU means that firms:
A. Are free to set up international cartels.

B. May be refused permission to take over a US competitor.

C. Can not be made to repay government financial assistance.

D. Can cross-subsidise loss-making services from profitable activities.

Discussion
B. May be refused permission to take over a US competitor.
20. Within an international context, what are
'economies of scope' synonymous with?
A. Reusing a resource from one business/country in additional
businesses/countries.

B. Decreased cost per unit of output.

C. Buying components in a bulk.

D. Any of the above.

Discussion
A. Reusing a resource from one business/country in additional
businesses/countries.

21. Globalization refers to:

A. A more integrated and interdependent world

B. Less foreign trade and investment

C. Global warming

D. Lower incomes worldwide

Discussion
A. A more integrated and interdependent world
22. Which of the following could be defined as
a multinational company?
A. A firm that owns shares in a foreign company but does not
participate in the company's decision making.

B. A UK based internet package holiday firm specializing in selling

tours to Turkey to German customers.

C. A firm owning a chain of supermarket outlets outside its country of

origin.

D. A finance company transferring its HQ and all its activities from

the UK to the US.

Discussion
C. A firm owning a chain of supermarket outlets outside its country of
origin.
23. Why might MNCs in the past have focused their
marketing activities on the triad?
A. That is where the most lucrative markets were located.

B. Income per head in developing countries was relatively low.

C. Transport and communication links were improving outside the tri

Discussion
A. That is where the most lucrative markets were located.
24. Which of the following statements on civil
law systems would be seen as an advantage by
business?
A. Civil law systems operate in very few countries.

B. Relevant areas of law are much easier to find than in common law
systems.

C. Relevant areas of law are more difficult to find than in common law
systems.

D. Lawyers act as oral advocates for their clients.

Discussion
B. Relevant areas of law are much easier to find than in common law
systems.

25. The law relating to E-Commerce fits which of

the following descriptions:
A. It comprises a single set of laws.

B. The law lacks clarity.

C. There is no problem applying contract law to the internet.

D. The law makes it easy to deal with foreign computer hackers.

Discussion
B. The law lacks clarity.
. Which of the following statements is not true
when describing a successful strategy?
A. It provides some property that is unique or distinctive

B. It provides the means for renewing competitive advantage

C. It addresses changes in the external environment

D. It guarantees long term survival

Discussion
B. It provides the means for renewing competitive advantage
2. In the context of strategic management
resources can be defined as:
A. The knowledge and skills within the organization

B. Something that an organization owns or controls that cannot be

copied

C. Something that an organization owns, controls or has access to on

a semipermanent basis

D. The physical assets of the organization

Discussion
D. The physical assets of the organization
3. In the context of strategic management,
stakeholders can be defined as:
A. An individual or group with a financial stake in the organization

B. An external individual or group that is able to impose constraints

on the organization

C. Internal groups or individuals that are able to influence strategic

direction of the organization

D. An individual or group with an interest in the organization's

activities and who seeks to influence them

Discussion
C. Internal groups or individuals that are able to influence strategic
direction of the organization
4. In the case where an organization acquires its
supplier, this is an example of:
A. Horizontal integration
B. Forwards vertical integration

C. Backwards vertical integration

D. Downstream vertical integration

Discussion
D. Downstream vertical integration
5. Knowledge which is difficult to define and
codify is known as:
A. Explicit

B. Tangible

C. Tacit

D. Random

Discussion
A. Explicit
6. Competitive advantage based on the creation
of opportunities using internal resources is
characterized by which approach/view?
A. The positioning approach

B. The outside-in approach

C. The resource-based view

D. The knowledge-management approach

Discussion
C. The resource-based view
7. 'Reputation' in the context of an
organization's resources can provide
competitive advantage because:
A. It is difficult to copy

B. It is based on word-of-mouth
C. It is a threshold resource

D. It is explicit

Discussion
A. It is difficult to copy
8. A strategic manager that seeks to reach
acceptable profit targets as opposed to making
as much profit as possible is making decisions
of which type?
A. Satisfactory

B. Satisficing

C. Irrational

D. Optimal

Discussion
A. Satisfactory
9. 'Logical incrementalism' can be described as:
A. Careful design and planning

B. Emergent

C. Cautious resource allocation

D. Top management rational analysis

Discussion
D. Top management rational analysis
10. An organization in which strategy
development is characterized by internal
political negotiation and self-interest is
operating in which strategy-making mode?
A. The transactive mode

B. The muddling through mode

C. The command mode

D. The emotional mode

Discussion
C. The command mode
11. McDonalds is deciding whether to expand into
manufacturing kitchen equipment in China. At
what level is this decision likely to be made?
A. Business

B. Corporate

C. Functional

D. International

Discussion
A. Business
12. Diversification into many unrelated areas is
an example of:
A. Risk management

B. Good management

C. Uncertainty reduction

D. Sustainability

Discussion
C. Uncertainty reduction
13. Corporate governance is concerned with:
A. Executive remuneration, disclosure of information, auditing and
accounting procedures, and organizations' management structures

B. Elections to the board of directors

C. Relationships with national governments

D. Corporate-level strategy
Discussion
C. Relationships with national governments
14. The principal-agent problem is concerned
with:
A. Procurement

B. Appropriation of shareholders' investment by a firm's managers

C. How to control a firm's distributors and dealers

D. Corporate social responsibility

Discussion
D. Corporate social responsibility
15. The Six Forces framework is based on the
principle of:
A. Resource-based view

B. Conduct - structure - performance

C. Econometrics

D. Structure - conduct – performance

Discussion
A. Resource-based view

16. In the Six Forces, the 'threat of new

entrants' relates to:
A. Barriers to entry

B. Substitutes

C. Switching costs

D. Buyer power

Discussion
D. Buyer power
17. An industry characterized by irregular
patterns of stability, rapid technological
change, high uncertainty and global competition
can be described as:
A. Hypercompetitive

B. Hyperactive

C. Atypical

D. Co-optive

Discussion
D. Co-optive
Unit 2
18. When a firm seeks the benefits of global
integration and local adaptation, it is best
described as which type of strategy?
A. Transnational

B. Global

C. Multi-national

D. Global-local

Discussion
C. Multi-national
19. A strategic decision can be distinguished
from other types of decisions by three factors,
these
are magnitude, time-scale and:
A. Commitment

B. Riskiness

C. Impact

D. Longevity
Discussion
B. Riskiness
20. 'Influence' is defined as the ability to
____________ someone to something they would
not otherwise have done.
A. Intimidate

B. Force

C. Order

D. Persuade

Discussion
A. Intimidate
21. The authors believe there are three tests
that can be applied to judge whether a
strategy is 'good'. These are:
A. Fit, distinctiveness, sustainability

B. Fit, internal resources, external environment

C. Distinctiveness, internal resources, fit

D. Sustainability, distinctiveness, external environment

Discussion
B. Fit, internal resources, external environment

22. According to Porter, dealing with the paradox

of premature commitment versus not
enough commitment involves some kind of:
A. Trade-off

B. Lock-in

C. Lock-out

D. Diversification
Discussion
C. Lock-out
23. Which of the following industries is least
likely to follow the conventional life-cycle
model?
A. Software development

B. Coal mining

C. Insurance broking

D. Hairdressing

Discussion
A. Software development
24. Brandenburger and Nalebuff added a sixth
force to Porter's Five Forces. It is known
as:
A. The threat of substitutes

B. The power of complementors

C. Seller power

D. Government regulation

Discussion
A. The threat of substitutes

25. A situation in which the joint moves of two

firms can determine how much money each
firm can make or lose can be explained using the
story of:
A. The Trojan Horse

B. The Icarus Paradox

C. The Prisoner's Dilemma

D. The Icarus Dilemma

Discussion
D. The Icarus Dilemma
26. In the context of environmental analysis,
'munificence' means:
A. The extent to which resources are freely available to support firms
in an industry and enable them to grow

B. The extent to which it is diverse

C. The extent to which it is stable or turbulent

D. The extent to which the industry follows the conventional life-cycle

stages

Discussion
C. The extent to which it is stable or turbulent

27. A 'market driven' firm will typically:

A. Develop new products and then find someone to sell them to

B. Define the target market and produce products that will satisfy
those customers' needs

C. Operate in a product-oriented fashion

D. Suffer from market-myopia

Discussion
B. Define the target market and produce products that will satisfy
those customers' needs
28. Segmentation is a way of:
A. Subdividing markets

B. Subdividing industries

C. Differentiating products

D. Subdividing organizations into departments

Discussion
A. Subdividing markets
29. A B2C market is:
A. Business to commercial

B. Business to consumer

C. Business to contract

D. Business to corporate

Discussion
D. Business to corporate
30. Segmentation is a compromise between two
ideals: mass marketing and:
A. Customization

B. Uniformity

C. Innovation

D. Convergence of tastes

Discussion
B. Uniformity
31. Porter's generic strategies are:
A. Low price, differentiation, focus

B. Cost leadership, differentiation, cost focus, focus differentiation

C. Price leadership, differentiation, focus

D. Low cost, differentiation, focus differentiation

Discussion
B. Cost leadership, differentiation, cost focus, focus differentiation
32. Subsidiaries consider regional environment
for policy / Strategy formulation is known as
A. Polycentric Approach

B. Regiocentric Approach

C. Ethnocentric Approach
D. Geocentric Approach

Discussion
B. Regiocentric Approach
33. 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

Discussion
C. Mercantilism
34. Which is not an Indian Multinational Company?
A. Unilever

B. Asian Paints

C. Piramal

D. Wipro

Discussion
A. Unilever
35. 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

Discussion
D. A more integrated and interdependent world
36. All the following statements are correct
except:
A. Case studies examine specific mergers and look for firm specific
examples of merger benefits.

B. Stock market studies tend to suggest that most of the stock market
gains from merger accrue to shareholders of target firms.

C. Financial and accounting studies typically conclude that mergers

benefit shareholders

D. Case studies, the stock market and financial accounting based

studies typically conclude that mergers are not always a good idea.

Discussion
C. Financial and accounting studies typically conclude that mergers
benefit shareholders
37. All of the following examples are
hypothetical cases of horizontal growth except:
A. Coca Cola and Pepsi Cola merge

B. Manchester United and Manchester City merge

C. British Airways and Easyjet merge

D. Ford and Michelin merge

Discussion
D. Ford and Michelin merge
38. In 90’s the global management perception was
based on
A. Standardization v/s adaptation

B. Globalization v/s localization

C. Global integration v/s Local Responsiveness

D. Local responsiveness

Discussion
C. Global integration v/s Local Responsiveness
39. Which of the following is an advantage of
turnkey projects?
A. Can earn a return on knowledge asset

B. Will not create a competitor

C. Tight control of operations

D. All the above

Discussion
A. Can earn a return on knowledge asset
40. CISF pricing includes the following
A. Commission is paid to the agent involved in the transaction

B. Cost of the goods exported

C. Freight & Insurance charges for the goods exported

D. All of the above

Discussion
D. All of the above
41. Vertical mergers are those in which the
participants are
A. In the same industry.

B. In different industries

C. In different phases of the value chain

D. None of the above.

Discussion
C. In different phases of the value chain

42. Which of the following are commonly cited

1. When a firm seeks the benefits of global
integration and local adaptation, it is best
described as which type of strategy?
A. Transnational

B. Global

C. Multi-national

D. Global-local

Discussion
C. Multi-national

2. A strategic decision can be distinguished from

other types of decisions by three factors,
these are magnitude, time-scale and:
A. Commitment

B. Riskiness

C. Impact

D. Longevity

Discussion
B. Riskiness
3. 'Influence' is defined as the ability to
____________ someone to something they would not
otherwise have done.
A. Intimidate

B. Force

C. Order

D. Persuade

Discussion
A. Intimidate
4. The authors believe there are three tests that
can be applied to judge whether a strategy is
'good'. These are:
A. Fit, distinctiveness, sustainability

B. Fit, internal resources, external environment

C. Distinctiveness, internal resources, fit

D. Sustainability, distinctiveness, external environment

Discussion
B. Fit, internal resources, external environment

5. According to Porter, dealing with the paradox

of premature commitment versus not enough
commitment involves some kind of:
A. Trade-off

B. Lock-in

C. Lock-out

D. Diversification

Discussion
C. Lock-out
6. In terms of the PESTLE analysis, the
liberalizing of international trade and tariff
regimes could go in which section or sections?
A. Political

B. Legal

C. Political and economic and legal

D. Political and environmental

Discussion
D. Political and environmental
7. Which of the following industries is least
likely to follow the conventional life-cycle
model?
A. Software development

B. Coal mining

C. Insurance broking

D. Hairdressing

Discussion
A. Software development

8. Brandenburger and Nalebuff added a sixth force

to Porter's Five Forces. It is known as:
A. The threat of substitutes

B. The power of complementors

C. Seller power

D. Government regulation

Discussion
A. The threat of substitutes
9. A situation in which the joint moves of two
firms can determine how much money each firm can
make or lose can be explained using the story of:
A. The Trojan Horse

B. The Icarus Paradox

C. The Prisoner's Dilemma

D. The Icarus Dilemma

Discussion
D. The Icarus Dilemma
10. According to Porter, if an organization does
not follow either a cost leadership strategy or
a differentiation strategy they are:
A. Hybrid

B. Stuck in the middle

C. Typical

D. No frills

Discussion
C. Typical

11. 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

Discussion
B. Domestic, International, Multinational, Global, Transnational
12. Which of the following is not a force in the
Porter Five Forces model?
A. Buyers

B. Suppliers

C. Complementary products

D. Industry rivalry

Discussion
C. Complementary products
13. A likely consequence of rationalization is:
A. Lower number of employees
B. Lower revenues

C. Higher costs

D. Price decrease

Discussion
B. Lower revenues
14. The agreement signed by Ranbaxy Laboratory
and Bayer AG of Germany in the year 1999 is an
example of
A. Subsidiary

B. Joint venture

C. Strategic International Alliance

D. License agreement

Discussion
C. Strategic International Alliance

15. When the transaction is of high value,

complex In nature and more technical __________
method of export sales contract is used.
A. Performa invoice

B. Purchase order

C. Sales contact

D. None of the above

Discussion
C. Sales contact

16. What are core competences?

A. Resources which critically underpin competitive advantage and
that others cannot obtain.
B. Activities and processes needed to meet customers' minimum
requirements and therefore to continue to exist.

C. Key skills required for success in a particular business.

D. Activities that underpin competitive advantage and are difficult for

competitors to imitate or obtain.

Discussion
D. Activities that underpin competitive advantage and are difficult for
competitors to imitate or obtain.
17. Specific cultural dimensions that does not
have a significant impact on cross-national
business interactions is
A. Hofstede’s five cultural dimensions

B. Monochromatic vs polychromatic tune

C. Communication

D. Geography

Discussion
D. Geography
18. Professional culture refers to
A. Shared belief of top managers about how they should manage
themselves and their employees

B. Shared code of ethics and other commonalities shared by members

of a given group

C. Both (a) and (c)

D. None of the above

Discussion
B. Shared code of ethics and other commonalities shared by members
of a given group
19. An attribute that doesn’t contribute to
Porters Diamond model is
A. Government

B. Organized Trade union

C. Factor Conditions

D. Demand Conditions

Discussion
B. Organized Trade union
20. Theory of Mercantilism propagates
A. Encourage exports and imports

B. Encourage exports and discourage imports

C. Discourage exports and imports

D. Discourage exports and encourage imports

Discussion
B. Encourage exports and discourage imports
21. Identify a factor that doesn’t play an
important role in attracting FDI
A. Laws, rule sand regulations

B. Administrative procedures and efficiency

C. Infrastructure related factors

D. Language

Discussion
D. Language
22. General electric follows ___________ as its
international operational strategy
A. GLOBAL

B. TRANSNATIONAL
C. INTERNATIONAL

D. MULTI-DOMESTIC

Discussion
B. TRANSNATIONAL
23. Which term refers to the phenomenon in which
the world’s population shares commonly
recognized cultural symbols?
A. global village

B. monopolistic market

C. global city

D. multicultureal village

Discussion
A. global village
24. According to the concept of the value chain,
a firm is profitable if:
A. the value it commands equals the costs involved in creating the
product.

B. it operates in global industries

C. the value it commands exceeds the costs involved in creating the

product

D. the value it commands is lower than the costs involved in creating

the product

Discussion
C. the value it commands exceeds the costs involved in creating the
product
25. In which industries is global competition
more common?
A. where the value chain functions are carried out at head office
B. where upstream and support activities are crucial to competitive
advantage

C. where downstream activities or other-tied activities are vital to

competitive advantage

D. in none of the above situations

Discussion
B. where upstream and support activities are crucial to competitive
advantage
26. A global market leader is an organization
which:
A. has the monopoly over several foreign markets.

B. has more than 50% global market share.

C. is ahead of the competition in terms of global innovation.

D. is recognized as being ahead of the rest in terms of market share.

Discussion
D. is recognized as being ahead of the rest in terms of market share.
1. Agreement on Textile and clothing was set out as a transitional process on 01 Jan 1995 for the
ultimate removal of quotas by WTO by 01 Jan 2007.

Answer: False

2.The first ever set of multilateral, legally enforceable rules covering international trade in services
is the General Agreement on Trade in services (GATS).

Answer: True

3. Trade Related Investment Measures (TRIMS) doesn’t apply for

 a) Measures that affect trade in goods.

b) Measures that lead to restrictions on quantities.

c) Discouraging measures that limit a company’s imports.

d) Discouraging measures that limit a company’s exports.

4. General Agreement on Trade in Services will not be applicable to

a) Services supplied from one country to another – cross border supply

b) Transaction of goods across the border – Export Import

c) Individuals traveling from own country to supply services in another – presence of natural
persons.

d) Consumers/firms making use of a service in another country – consumption abroad.

e) Foreign company setting up subsidiary or branches to provide services in another country –

commercial presence.

5. As a part of WTO guidelines, Agreement on Agriculture (AOA) doesn’t consider

a) Direct payments to farmers are permitted.

b) Indirect assistance and support to farmers including R & D support by govt. are not
permitted.

c) Domestic policies which directly effect on production and trade have to be cut back.

d) Least developed countries do not need to make any cuts.

6. WTO is the only international organization dealing with the rules of trade between
organizations.
Answer: True

7. The limit of holdings by Individual Foreign Institutional Investors in a Company has been raised
from 5 to 10 % of the company’s shares, while the aggregate limit has been increased from 24 to
34 %.

Answer: True

8. Quantitative restrictions refer to limit set by countries to curb

a) Imports

b) Exports

c) Imports & exports

d) None of the above

9. A Most Favored nation status doesn’t necessarily refer to

a) Same and equal economic treatment

b) Non-discriminatory treatment

c) Same tariff rates applicable

d) Uniform civil code

10. The world trade organization was formed in the year _________ with GATT as it basis.

a) 1993

b) 1994
 c) 1995

d) 1996

11. Geocentric staffing policy ensures best qualified people at suitable positions irrespective of their
national and cultural differences.

Answer: True

12. Basic objective of women to talk is to establish rapport and relationship while that of men is to
maintain status and exhibit skills.

Answer: True

13. Power distance Index (PDI) of 77 compared to a world average of 56.5 for India indicates

a) High level of inequality of power and wealth within the society

b) Low level of inequality of power and wealth within the society

c) High level of Political corruption

d) Low level of Human development Index

14. 2 Specific cultural dimensions that does not have a significant impact on cross-national
business interactions is

a) Hofstede’s five cultural dimensions

b) Monochromatic vs polychromatic tune

c) Communication

d) Geography
15. Professional culture refers to

a) Shared belief of top managers about how they should manage themselves and their
employees

b) Shared code of ethics and other commonalities shared by members of a given group

c) Both (a) and (c)

d) None of the above

16. Theory of Comparative advantage demonstrates that mutually advantageous trade cannot
occur when one trading partner has an absolute advantage.

Answer: False

17. Product life cycle theory states that an exporter country of a particular product can become an
importer country during the product cycle of a product.

Answer: True

18. An attribute that doesn’t contribute to Porters Diamond model is

a) Government

b) Organized Trade union

c) Factor Conditions

d) Demand Conditions

e) Firm strategy, structure and rivalry

19. _______ theory states that, lack of resources often helps countries to become competitive

a) Competitive theory
 b) Porters Diamond Model

c) Theory of Mercantilism

d) Product life cycle theory

e) None of the above

20. Theory of Mercantilism propagates

a) Encourage exports and imports

b) Encourage exports and discourage imports

c) Discourage exports and imports

d) Discourage exports and encourage imports

21. An international acquisition is a cross-border investment in which a foreign investor acquires an

established local firm and makes the acquired local firm a subsidiary business within its global
portfolio.

Answer: True

22. Backward vertical FDI occurs when an MNE enters a host country to produce intermediaries
that are intended to use as inputs in the host country.

Answer: False

23. Identify a factor that doesn’t play an important role in attracting FDI

a) Laws, rule sand regulations

b) Administrative procedures and efficiency

c) Cost of resources

d) Infrastructure related factors

e) Language
24. B2B sector specific policy of Indian Government is

a) FDI up to 100% subject to condition that they invest 26 % in favor of Indian Public
within 5 yrs

b) FDI up to 100%

c) FDI up to 100% subject to condition that they invest 26 % in favor of Indian Public within 10
yrs

d) FDI up to 49%

25. The country that attracts the largest FDI inflow is

a) India

b) China

c) USA

d) Brazil

26. The term economies of scale refer to the reductions in cost achieved by producing a large
volume of the product.

Answer: True

27. Multi-domestic firms extensive customize both their product offering and marketing strategy to
suit domestic home market only.

Answer: False

28. Firm that operates internationally is able to

a) earn a greater return from their skills and core competencies

b) realize location economies where they can be performed most efficiently

c) realize greater experience curve economies, which reduces the cost of production
 d) All the above

29. General electric follows ___________ as its international operational strategy

a) Global

b) International

c) Multi-domestic

d) Transnational

30. Factor of Interdependence in Multi-domestic strategy is

a) Low

b) Moderate

c) High

d) Very High

31. Contractual agreements as global market entry involve a transfer of trademarks or human skills.

Answer: True

32. When one company acquires another, the one acquired becomes a subsidiary of the acquiring
company.

Answer: True

33. In 90’s the global management perception was based on

a) Standardization v/s adaptation

b) Globalization v/s localization

 c) Global integration v/s Local Responsiveness

d) Local responsiveness

34. Which of the following is an advantage of turnkey projects?

a) Can earn a return on knowledge asset

b) Will not create a competitor

c) Tight control of operations

d) All the above

35. The agreement signed by Ranbaxy Laboratory and Bayer AG of Germany in the year 1999 is
an example of

a) Subsidiary

b) Joint venture

c) Strategic International Alliance

d) License agreement

36. The sales contract is to be prepared only on stamp paper.

Answer: False

37. The risk of direct exporting is relatively lower since the investments are also lesser.

Answer: False

38. CISF pricing includes the following

a) Commission is paid to the agent involved in the transaction

b) Cost of the goods exported

 c) Freight & Insurance charges for the goods exported

d) All of the above

39. When the transaction is of high value, complex In nature and more technical __________
method of the export sales contract is used.

a) Performa invoice

b) Purchase order

c) Sales contact

d) None of the above

40. Which one of the following is a method for an exporter to get a contract

a) Proforma invoice

b) Purchase order

c) Sales contract

d) All the above

41. ARE 1 is the form for removal of excisable goods from the factory premises for export purposes

Answer: True

42. Transit credit is the credit which can be opened by small countries whose credits may not be
readily acceptable in another country.

Answer: True

43. Credits transferable by original beneficiary in favor of secondary beneficiary are known as

a) Deferred credits
 b) Transit credits

c) Installment credits

d) Transferable credits

44. When the exporter, expects the importer, to make the payment immediately upon the draft
being presented to him is called.

a) Sight Draft.

b) Usance Draft

c) Demand draft

d) Pay Note

45. The basic objective of export Promotion Council is to promote and develop the Exports of the

a) Particular products of country

b) Only attractive projects of the country

c) Only services industry products of the country.

d) Overall exports of the country.

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AIMA Online Assignments International Business

AIMA Online Assignments

International Business (IB06)

NOTE: The answers are boldly marked.

Question 1:- The theory of Comparative cost advantage is given by

a) Porter

b) Adam Smith

c) Varnoon

d) D.Richardo

Question 2:- Trade Related Investment Measures (TRIMS) doesn’t apply for

a) Measures that lead to restrictions in quantities.

b) Discouraging measures that limit a company’s imports

c) Discouraging measures that limit a company’s exports.

d) ALL OF THE ABOVE

Question 3:- As a part of WTO guidelines, Agreement on Agriculture (AOA) doesn’t consider

a) Direct payments to farmers are permitted.

b) Indirect assistance and support to farmers including R & D support by govt. are not
permitted

c) Domestic policies which directly effect on production and trade have to be cut
back.

d) Least developed countries do not need to make any cuts.

Question 4:- A Most Favored nation status doesn’t necessarily refers to

a) Same and Equal Treatment

b) Non-discriminatory Treatment

c) Same tariff rates applicable

d) Uniform civil code

Question 5:- Power distance Index (PDI) of 77 compared to a world average of 56.5 for India
indicates

a) High level of inequality of power and wealth within the society

b) Normal Power and Wealth

c) High level of political corruption

d) Low level of Human Development Index

Question 6:- Identify a factor that doesn’t play an important role in attracting FDI

a) Language

b) Laws, rules and regulations

c) Cost of resources

d) Infrastructure related factors

Question 7:- Factor of Interdependence in Multi-domestic strategy is

a) LOW

b) MODERATE

c) HIGH

d) VERY HIGH

Question 8:- 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

Question 9:- An attribute that doesn’t contribute to Porters Diamond model is

a) Government

b) Organized Trade union

c) Factor Conditions

d) Demand Conditions

Question 10:- Which of these is a characteristic of multinational corporations>

a) At least one -third directors are foreign nationals

b) The company does 40% of its business in foreign markets

c) The overseas markets are larger than the domestic market

d) The affiliates are responsive tio a number of important environmental forces

Question 11:- 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) H .O. THEORY

Question 12:- The Theory of Absolute Cost Advantage is given by

a) Adam smith

b) D. Richardo
c) Raymond Varnoon

d) Porter

Question 13:- The Theory of Relative Factor Endowments is given by

a) Ohilin-Hecksher

b) FY Taylor

c) Richardo

d) Porter

Question 14:- …………… is application of knowledge which redefine the boundaries of global
business

a) Cultural Values

b) Society

c) Technology

d) Economy

Question 15:- Capitalistic, communistic and mixed are the types of

a) Economic system

b) Political system

c) Social System

d) Cultural Attitudes

Question 16:- General Agreement on Trade in Services will not be applicable to

a) Services supplied from one country to another – cross border supply

b) Transaction of goods across the border – Export Import

c) Individuals traveling from own country to supply services in another – presence of natural
persons.

d) Consumers/firms making use of a service in another country – consumption

abroad

Question 17:- Quantitative restrictions refer to limit set by countries to curb

a) Imports

b) Exports

c) Imports and Exports

d) All of the above

Question 18:- India is an

a) Emerging economy

b) Developed economy

c) Less developed economy

d) None of these

Question 19:- The world trade organization was formed in the year _________ with GATT as it
basis.

a) 1992

b) 1993

c) 1995

d) 1994
Question 20:- ________theory states that, lack of resources often helps countries to become
competitive

a) Competitive theory

b) Porters Diamond Model

c) Theory of Mercantilism

d) Product life cycle theory

Question 21:- Theory of Mercantilism propagates

a) Encourage imports and exports

b) Encourage exports and discourage imports

c) Discourage imports

d) None of these

Question 22:- The country that attract the largest FDI inflow is

a) USA

b) INDIA

c) CHINA

d) BRAZIL

Question 23:- General electric follows ___________ as its international operational strategy

a) GLOBAL

b) TRANSNATIONAL

c) INTERNATIONAL

d) MULTI-DOMESTIC
Question 24:- Typically the last step in the internationalization process is:

a) Licensing

b) Exporting

c) Wholly owned subsidiaries

d) Foreign Direct Investment

Question 25:- Which of the following is an advantage of turnkey projects?

a) Can earn a return on knowledge asset

b) Will not create a competitor

c) Tight control of operations

d) All the above

Question 26:- Which of these is/are the characteristic of a licensing agreement

a) The licensor might provide access to some of its patents or trademarks

b) The licensor might provide access to technology

c) It might be used to avoid the risks of foreign involvement

d) All of the above

Question 27:- IBRD (International Bank for Reconstruction and Development) also known as

a) EXIM Bank

b) World Bank

c) IMF

d) International Financial Bank

 Question 28:- Ultimately ……………… was replaced by the …………….on 1st Jan 1995

a) GATT/WTO

b) GATS/IMF

c) WTO/WORLD BANK

d) WORLD BANK/WIPO

Question 29:- Which is the right sequence of a stages of Internationalization

a) Domestic, Transnational, Global, International, Multinational

b) Domestic, International, Multinational, Global, Transnational

c) Domestic, Multinational, International, Transnational, Global

d) Domestic, International, Transnational, Multinational, Global

1. Which of the following is not related to Porter’s Diamond

Model

1. Demand condition
2. Related and supporting industries
3. Industry strategy, structure and rivalry
4. Factor conditions

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">3. Industry strategy,
structure and rivalry
2 the support activities in Porter’s value chain are which of the
following
1. Infrastructure, HRM, procurement, sales and marketing
2. Technology, infrastructure, operations, HRM
3. Procurement, technology.HRM, infrastructure
4. Infrastructure, technology, operations, procurement

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">4. Infrastructure,
technology, operations, procurement

3 According to Porter which of the following activity support the

entire value chain:

1. Procurement
2. Operations
3. HRM
4. Infrastructure

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">4. Infrastructure
4 According to Porter, if an organization does not follow either a cost
reduction strategy or product differentiation strategy they are:

1. Hybrid
2. Incompetent
3. Question mark
4. Stuck in the middle

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">4. Stuck in the middle
Q.5 In Porter’s Generic Strategies model, a focus strategy involves:

1. Selling limited products

2. Selling to a narrow customer segment
3. Selling to one region only
4. Selling products that have narrow use

Answer
 <pstyle-"pedding-top:10px:" style="box-sizing: inherit;">2. Selling to a narrow
customer segment
Q.6. Find the odd one out:

1. Demand conditions
2. Government
3. Related industries
4. Factor conditions

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">6. Government
Q.7 Kim Chan and Renee Mouborgne talks about an uncontested
market place which is:

1. Red ocean
2. Blue ocean
3. Blue ocean strategy
4. Red ocean strategy

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">3.Blue ocean
strategy
Q.8 Blue ocean strategy consists of four stages, the correct sequence is:

1. Eliminate, raise, create, reduce

2. Eliminate, reduce, create, raise
3. Eliminate, create, raise, reduce
4. Eliminate, reduce, raise, create

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">4. Eliminate, reduce,
raise, create
Q.9 In Porter’s Five Force model economies of scale, capital
requirements, access to distribution channel, latest technology are
barriers to which of the following element:
1. Bargaining power of buyers
2. Threat of close substitutes
3. Competitive rivalry among firms
4. Threat of new entrants

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">4. Threat of new
entrants
Q.10 Polycentric approach is also known as

1. Host country approach

2. Home country approach
3. Global approach
4. Hybrid approach (both home and host)

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">1. Host country
approach
Q.11. Farmers in an area, gather to form cooperatives in order to sell
their products to buyers directly, replacing their previous middleman.
This is an example of

1. Forward integration
2. Backward integration
3. Supplier power
4. Threat of entry

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">1. Forward
integration
Q.12. The bargaining power of supplier is low compared to the buyer
firm in case where:

1. There is a threat of new entrants

2. The firm has many suppliers
3. Supplier is only one in the industry
4. Volume of sales is high

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">2. The firm has many
suppliers
Q.13. The bargaining power of buyer is high when:

1. The product is differentiated

2. The product is undifferentiated
3. They have little information
4. The buyer requires a high quality product

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">2. The product is
undifferentiated
Q.14 Which strategy of Michael Porter states that the national home
base of an organization with specific factors, create competitive
advantage on a global scale

1. Porter’s value chain 2.

2. Porters generic strategy
3. Porters diamond model
4. Porters Five force model

Answer
<pstyle-"pedding-top:10px:" style="box-sizing: inherit;">3. Porters diamond
model
Question 1: In which of the following modes of entry, does the domestic
manufacturer give the right to use intellectual property such as patent and
trademark to a manufacturer in a foreign country for a fee

1. Licensing
2. Contract manufacturing
3. Joint venture
4. None of these

Answer: (a) Licensing

Question 2: Outsourcing a part of or entire production and concentrating on
marketing operations in international business is known as

1. Licensing
2. Franchising
3. Contract manufacturing
4. Joint venture

Answer: (c) Contract manufacturing

Question 3: When two or more firms come together to create a new business
entity that is legally separate and distinct from its parents it is known as

1. Contract manufacturing
2. Franchising
3. Joint ventures
4. Licensing

Answer: (c) Joint ventures

Question 4: Which of the following is not an advantage of exporting?

1. Easier way to enter into international markets

2. Comparatively lower risks
3. Limited presence in foreign markets
4. Less investment requirements

Answer:(c) Limited presence in foreign markets

Question 5: Which one of the following modes of entry requires higher level of
risks?

1. Licensing
2. Franchising
3. Contract manufacturing
4. Joint venture

Answer: (d) Joint venture

Question 6: Which one of the following modes of entry permits greatest

degree of control over overseas operations?

1. Licensing/franchising
 2. Wholly owned subsidiary
3. Contract manufacturing
4. Joint venture

Answer: (b) Wholly owned subsidiary

Question 7: Which one of the following modes of entry brings the firm closer
to international markets?

1. Licensing
2. Franchising
3. Contract manufacturing
4. Joint venture

Answer: (d) Joint venture

Question 8: Which one of the following is not amongst India’s major export
items?

1. Textiles and garments

2. Gems and jewellery
3. Oil and petroleum products
4. Basmati rice

Answer: (c) Oil and petroleum products

Question 9: Which one of the following is not amongst India’s major import
items?

1. Ayurvedic medicines
2. Oil and petroleum products
3. Pearls and precious stones
4. Machinery

Answer: (b) Oil and petroleum products

Question 10: Which one of the following is not amongst India’s major trading
partners?

1. USA
2. UK
3. Germany
 4. New Zealand

Answer: (d) New Zealand

1. What are the four factor endowments?

A. national resources, labor, physical capital and human capital

B. types of technology

C. material inputs used up in the process of production

D. international differences in climate

Discussion

A. national resources, labor, physical capital and human capital

2. The Heckscher- Ohlin model is principally

focused on what aspect of economics?
A. international trade

B. supply and demand

C. normative economics

D. production possibility frontier

Discussion

A. international trade
3. A no-trade world will have which of the
following characteristics:
A. countries will have same relative endowments of production factors

B. consumers across countries will have identical and homogenous

tastes

C. there will be no distortions or externalities

D. all of the above

Discussion
D. all of the above
4. Transportation cost of trade affects:
A. pattern of trade

B. boundaries between tradable and non-tradable goods

C. global supply chains

D. all of the above

Discussion

D. all of the above

5. International Trade is most likely to generate

short-term unemployment in:
A. industries in which there are neither imports nor exports

B. import-competing industries

C. industries that sell to domestic and foreign buyers.

D. industries that sell to only foreign buyers

Discussion

B. import-competing industries

6. What was the first economic theory of

international trade to be developed?
A. the theory of mercantilism

B. the theory of comparative advantage

C. the theory of absolute advantage

D. the heckscher-ohlin theory

Discussion

A. the theory of mercantilism

7. According to Adam Smith, the trade between
countries should happen _____.
A. naturally according to the market forces

B. under government regulation

C. using factors that are available

D. only when a country has an absolute advantage

Discussion

D. only when a country has an absolute advantage

8. If a nation has an open economy it means that
the nation:
A. allows private ownership of capital.

B. has flexible exchange rates

C. has fixed exchange rates

D. conducts trade with other countries

Discussion

D. conducts trade with other countries

9. International trade forces domestic firms to
become more competitive in terms of
A. the introduction of new products

B. product design and quality

C. product price

D. all of the above

Discussion

D. all of the above

10. The movement to free international trade is
most likely to generate short-term unemployment
in which
industries
A. industries in which there are neither imports nor exports

B. import-competing industries.

C. industries that sell to domestic and foreign buyers

D. industries that sell to only foreign buyers

Discussion

B. import-competing industries.

11. According to the principle of comparative

advantage:
A. south korea should export steel

B. south korea should export steel and dvds

C. japan should export steel

D. japan should export steel and dvds

Discussion

A. south korea should export steel

12. Country A has an absolute advantage in
A. product x

B. product y

C. neither x nor y

D. both x and y

Discussion

B. product y
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

Discussion

D. a more integrated and interdependent world

14. Comparative Cost Trade Theory is given by
A. adam smith

B. david ricardo

C. gottfried haberle

D. heckscher ohlin

Discussion

B. david ricardo

15. ……………...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

Discussion

B. letter of credit
16. 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.

Discussion

C. marketing activities and plans

17. The first phase of globalization started
around 1870 and ended with …..
A. world war i

B. world war ii

C. the establishment of gatt

D. in 1913 when gdp was high

Discussion

A. world war i
18. 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

Discussion
C. mercantilism
19. The Theory of Absolute Cost Advantage is
given by
A. david ricardo

B. adam smith

C. f w taylor

D. ohlin and heckscher

Discussion

B. adam smith
20. The Theory of Relative Factor Endowments is
given by
A. david ricardo

B. adam smith

C. c. f w taussig

D. ohlin and hecksher

Discussion

D. ohlin and hecksher

21. The theory of comparative cost advantage is
given by
A. david ricardo

B. adam smith

C. f w taussig

D. ohlin and heckscher

Discussion

A. david ricardo
Multinational Enterprises
22. A multinational is a firm that controls and
manages production facilities in
A. both developed and developing countries

B. at least two countries

C. one country but relies on multiple markets for the consumption of

goods it produces

D. at least two developed countries and one developing country

Discussion

B. at least two countries

23. Locational advantages are based on which
combination of the following specific country
characteristics
A. a large reserve of natural resources, a large local market and
efficiency opportunities

B. a small reserve of natural resources, a large local market and

efficiency opportunities

C. a small reserve of natural resources, a small local market and

efficiency opportunities

D. a large reserve of natural resources, a small local market and

efficiency opportunities

Discussion

A. a large reserve of natural resources, a large local market and

efficiency opportunities
24. Horizontal integration occurs when
A. firm creates singular country production facilities, each of which
produces different good or goods
 B. firm creates multiple production facilities, each of which produces
the same good or goods.

C. firm creates multiple production facilities, each of which produces

different good or goods

D. firm creates singular country facilities, each of which produces the

same good or goods

Discussion

B. firm creates multiple production facilities, each of which produces

the same good or goods.
25. Which of the following would be an example
of foreign direct investment from the United
States to
Taiwan?
A. a u.s. bank buys bonds issued by a taiwan computer manufacturer.

B. a u.s. car manufacturer enters into a contract with a taiwan firm

to make and sell it spark plugs.

C. microsoft hires a taiwanese computer programmer to debug some

software for it.

D. the state of california rents space in taipei for one of its employees
to use promoting tourism in

Discussion

B. a u.s. car manufacturer enters into a contract with a taiwan firm

to make and sell it spark plugs.

1. Geographical indications specify

A. Place of origin of goods.

B. Special characteristics of the product associated with the place of origin.

C. Place and special characters of the product.

D. Place or special characters of the product.

ANSWER: C

2. Business across several countries with some decentralization of

management decision making to subsidiaries is

A. International business.

B. Multinational business

3. By entering into international business, a firm expects an

improvement in

A. Marketing.

B. All spheres of marketing, operation and finance simultaneously.

C. Any or all spheres of marketing, operation and finance.

D. Finance only.

ANSWER: C

4. By having business in different countries, a firm reduces

A. credit risk.

B. political risk.

C. financial risk.

D. business risk.

ANSWER: B

5. Wholly owned subsidiary can be set up

A. as a Greenfield venture.

B. to acquire an existing firm.

C. to have products marketed overseas.

D. to have management is overseas.

ANSWER: A

6. The essential feature of FDI is

A. Investment of very high value.

B. Investment in shares.

C. Investor’s influence on the management of the enterprise.

D. Investment of low value.

ANSWER: C

7. No new investment in the host country is created in the case of

A. Greenfield FDI.

B. Acquisition.

C. Horizontal FDI.

D. Vertical FDI.

ANSWER: B

8. A firm investing in a foreign country to distribute the products

therein creation of

A. Asset seeking FDI.

B. Backward vertical FDI.

C. Forward vertical FDI.

D. Distribution FDI.

ANSWER: C

9. The disadvantages of Greenfield FDI as compared to acquisition is

A. Profit will be less.

B. Size of investment will be high.

C. Lesser control in management.

D. Delay in the establishment.

ANSWER: D

10. Conglomerate FDI refers to

A. FDI made by a group of firms.

B. FDI made in subsidiaries.

C. FDI made in similar products.

D. FDI made in unrelated products.

ANSWER: D

Question 30:- Subsidiaries consider regional environment for policy / Strategy formulation is known
as

a) Polycentric Approach

b) Regiocentric Approach

c) Ethnocentric Approach

d) Geocentric Approach