International Business Environment Set 2

QN1. 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

Answer

Answer: a) The World War I

QN2. IBRD (International Bank for Reconstruction and Development) also known as

a) Exim Bank

b) World Bank

c) International Monetary fund

d) International Bank

Answer

Answer: b) World Bank

QN3. Ultimately ………………was replaced by the …………….on 1st Jan 1995

a) GATS, WTO

b) WTO, GATT

c) GATT, WTO

d) IMF, GATT

Answer

Answer: c) GATT, WTO

QN4. 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

Answer: b) Domestic, International, Multinational, Global, Transnational

QN5. Subsidiaries consider regional environment for policy / Strategy formulation is known as

a) Polycentric Approach

b) Regiocentric Approach

c) Ethnocentric Approach

d) Geocentric Approach

Answer

Answer: b) Regiocentric Approach

QN6. 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

Answer: c) Mercantilism

QN7. The Theory of Absolute Cost Advantage is given by

a) David Ricardo

b) Adam Smith

c) F W Taylor

d) Ohlin and Heckscher

Answer

Answer: b) Adam Smith

QN8. The Theory of Relative Factor Endowments is given by

a) David Ricardo

b) Adam Smith

c) F W Taussig

d) Ohlin and Hecksher

Answer

Answer: d) Ohlin and Hecksher

QN9. The theory of Comparative cost advantage is given by

a) David Ricardo

b) Adam Smith

c) F W Taussig

d) Ohlin and Hecksher

Answer

Answer: a) David Ricardo

QN10. ……………is application of knowledge which redefine the boundaries of global business

a) Cultural Values

b) Society

c) Technology

d) Economy

Answer

Answer: c) Technology

QN11. Capitalistic, communistic and Mixed are the types of

a) Economic System

b) Social System

c) Cultural Attitudes

d) Political System

Answer

Answer: a) Economic System

QN12. Which is not an Indian Multinational Company?

a) Unilever

b) Asian Paints

c) Piramal

d) Wipro

Answer

Answer: a) Unilever

QN13. 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

Answer: d) A more integrated and interdependent world

QN14. 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

Answer: c. Complementary products

QN15. Comparative Cost Trade Theory is given by

a) Adam Smith

b) David Ricardo

c) Gottfried Haberler

d) Heckscher Ohlin

Answer

Answer: b) David Ricardo

QN16._____ 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

Answer: a) Bill of Lading

QN17. 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

Answer: c) marketing activities and plans

QN18. Select example of Indian Multinational Company

a) Hindusthan Unilever

b) Videocon

c) Cargill

d) Tesco

Answer

Answer: b) Videocon

QN19. The simplest way to enter a foreign market is through.

a) Direct investment

b) Joint venturing

c) Contract manufacturing

d) Exporting

Answer

Answer: d) Exporting

QN20. IHRM is an area of academic study which focuses on:

a) Comparative research

b) The movement of individuals across national boundaries

c) The exchange of ideas and practices

d) The policies and practices of MNC’s

Answer

Answer: b) The movement of individuals across national boundaries

QN21. Which of the following statements best describes the typical behaviour of national governments towards imports and exports?

a) Exports are encouraged; imports are discouraged.

b) Both exports and imports are discouraged.

c) Imports are encouraged; exports are discouraged.

d) Both exports and imports are encouraged.

Answer

Answer: a) Exports are encouraged; imports are discouraged.

QN22. For destination countries, receipts from international tourism count as:

a) Exports.

b) Imports.

c) Both imports and exports,

d) None of the above.

Answer

Answer: a) Exports.

QN23. Which of the following is true?

a) The United States is the world’s largest importer and the largest exporter.

b) The Japan is the world’s largest importer and the US is the world’s largest

exporter.

c) The United States is the world’s largest importer and China is the world’s largest exporter.

d) The United States is the world’s largest importer and the Japan is the world’s largest exporter.

Answer

Answer: c) The United States is the world’s largest importer and China is the world’s largest exporter.

QN24. An arrangement in which one company allows another company to use its name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a royalty is called

a) licensing.

b) a joint venture.

c) direct investment

d) a trading company

e) importing

Answer

Answer: a) licensing.

QN25. The balance of payments includes which of the following?

a) a country’s balance of trade

b) foreign investments

c) foreign aid

d) tourist expenditures

e) all of the above

Answer

Answer: e) all of the above

QN26. Companies that want more control and are willing to invest considerable

resources in

a) trading company

b) licensing

c) direct investment

d) contract manufacturing

e) exporting

Answer

Answer: c) direct investment

QN27. Which of the following organizations was established by industrialized nations to loan money to underdeveloped and developing countries?

a) OPEC

b) NAFTA

c) The World Bank

d) The IMF

e) The United Nations

Answer

Answer: c) The World Bank

QN28. Before moving outside their own borders, companies must conduct

a) internal audits.

b) TQM programs.

c) language seminars

d) joint ventures.

e) environmental analyses.

Answer

Answer: e) environmental analyses.

QN29. When Colgate-Palmolive developed a hand-powered washing machine for

households in LDCs that do not have electricity, Colgate-Palmolive was following a

a) multinational strategy.

b) strategic alliance,

c) marketing strategy.

d) globalization strategy

e) joint venture.

Answer

Answer: a) multinational strategy.

QN30. When IBM and Apple joined together in hopes of obtaining a competitive

advantage on a worldwide basis, this exemplified a

a) cartel.

b) joint venture.

c) direct investment.

d) strategic alliance.

e) contract manufacturing deal.

Answer

Answer: d) strategic alliance.

QN31. Wendy’s, Pizza Hut, and McDonald’s are well-known with international visibility.

a) franchisers

b) trading companies

c) joint ventures

d) contract manufacturers

e) strategic alliances

Answer

Answer: a) franchisers

QN32. Subsidiaries consider regional environment for policy / Strategy formulation is known as

a) Polycentric Approach

b) Regiocentric Approach

c) Ethnocentric Approach

d) Geocentric Approach

e) Multicentric Approach

Answer

Answer: b) Regiocentric Approach

QN33. 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

Answer: c) Mercantilism

QN34. The Theory of Relative Factor Endowments is given by

a) David Ricardo

b) Adam Smith

c) FW Taussig

d) Ohlin and Hecksher

Answer

Answer: d) Ohlin and Hecksher

QN35. Capitalistic, communistic and mixed are the types of

a) Economic System

b) Social System

c) Cultural Attitudes

d) Political System

Answer

Answer: a) Economic System

QN36. Which is not an Indian Multinational Company?

a) Hindusthan Unilever

b) Asian Paints

c) Piramal

d) Wipro

Answer

Answer: a) Hindusthan Unilever

QN37. 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

Answer: c) Complementary Products

QN38. In some countries the ratio of older people to total population is rising rapidly. This is important to business because:

a) It could lead to a falling tax burden.

b) It will increase the supply of labour.

c) It could change the pattern of demand for goods and services

d) It could increase economic growth.

Answer

Answer: c) It could change the pattern of demand for goods and services

QN39. The abolition of the Gold Control Act in 1992, allowed large import houses to import gold freely. This will

a) Increase the price of imported Gold.

b) Decrease the price of imported Gold.

c) Have no effect on the price of gold

d) Decreased the quality of gold imported.

Answer

Answer: b) Decrease the price of imported Gold.

QN40. When two companies join hands to manufacture new products it is called as

a) Merger

b) Joint venture

c) Acquisition

d) Production agreement

Answer

Answer: b) Joint venture

QN41. Restrictions to trade also include non-tariff barriers, such as and

a) Taxes, Tariffs

b) Legislation, Quotas

c) C. Duty, Fee

d) Subsidies, Taxes

Answer

Answer: b) Legislation, Quotas

QN42. Which of the following was not identified in class as a driving force behind globalization?

a) Advances in transportation

b) Advances in communication and transportation technology

c) Lower barriers to trade

d) Lower interest rates

Answer

Answer: d) Lower interest rates

QN43. Dumping refers to:

a) Exporting products no one in the producing country wants

b) Exporting products at a price below the cost of production

c) Exporting only the lowest quality products

d) Tossing unwanted cargo into the ocean during transport

Answer

Answer: b) Exporting products at a price below the cost of production

QN44. The price of one country’s currency in terms of another

a) the exchange rate.

b) the interest rate.

c) the Dow Jones industrial average

d) none of the above.

Answer

Answer: a) the exchange rate.

QN45. The WTO was established by the of multilateral trade negotiations.

a) Kennedy Round

b) Tokyo Round

c) Uruguay Round

d) Dillon Round

Answer

Answer: c) Uruguay Round