Business Environment and International Business MCQs

Question 1

Which of the following sets of items is not correctly matched?

Accepted Answer

Tax Financed ⇔ Deflation

Answer

Money Financed ⇔ Inflation

Answer

Bond Financed ⇔ High interest rates

Answer

Externally Financed ⇔ Imports minus Export

Question 2

Which of the following statement is incorrect?

Accepted Answer

FDI does not create capital in the domestic country

Answer

In foreign direct investment, foreign companies develop new companies in home country

Answer

Foreign companies open their subsidiaries in the country in FDI

Answer

FDI has favourable impact on production and employment in the state

Question 3

Custom unions always lead to

Accepted Answer

Both trade diversion and trade creation

Answer

Trade diversion alone

Answer

Trade creation alone

Answer

Neither trade diversion nor trade creation

Question 4

Will there to be the possibility of trade between two countries whose factor endowments are identical?

Accepted Answer

When there are differences in commodity prices in the two countries

Answer

When there is difference in commodities prices

Answer

When cost of production of different commodities differ between the two countries

Answer

When production functions of the same goods are identical

Question 5

Consider the following statements: 1. Fiat money has no intrinsic value, while the legal tender is any currency declared legal by a government. 2. Government can issue fiat currency and make it legal tender by setting it as the standard for debt repayment. Which of the statements given above is/are correct?

Accepted Answer

1 and 2

Answer

2 only

Answer

1 only

Answer

Neither 1 nor 2

Question 6

Which one of the following items was responsible for most of the increase in international liquidity since World War-II? (1) Gold (2) Dollars (3) Other Convertible Currencies (4) SDRs Select the correct answer using the options given below:

Accepted Answer

1, 2 and 4

Answer

1 and 3

Answer

2 and 3

Answer

2 and 4

Question 7

Deficit financing includes:

Accepted Answer

All the above

Answer

Borrowing from the Central Bank

Answer

Issues of new currency by the Government

Answer

Withdrawal of past accumulated cash balance by the government

Question 8

Which of the following have been recognized under the intellectual property eligible for creation of rights as per WTO mandate? (1) Computer software, music disc, performing art (2) Geographical indicator (3) Global positioning system (4) Journals, books, seeds, design, brand

Accepted Answer

1, 2 and 4

Answer

1, 2 and 3

Answer

4, 3 and 1

Answer

3, 1 and 2

Question 9

Which of the following terms describes the macro environment?

Accepted Answer

Indirect environment

Answer

Direct environment

Answer

Competitive environment

Answer

Social environment