Indias foreign Trade MCQs

Question. India is an
(a) Emerging economy
(b) Developed economy
(c) Less developed economy
(d) None of the options

Answer: A

Question. Regionalism is:
(a) 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) an international management orientation and a protectionist policy created to exclude third world countries from certain forms of international trade.
(d) an international management orientation.

Answer: B

Question. The currency used to buy imported goods is
(a) the buyer’s home currency.
(b) the seller’s home currency.
(c) the currency of a third country.
(d) special drawing rights.

Answer: B

Question. Which one of the following theories says that “to export was good and to be encouraged but to import was bad and to the discouraged.”
(a) Comparative cost theory
(b) The theory of absolute advantage
(c) Factor Endowment theory
(d) Mercantilist theory

Answer: D

Question. If the United States sells beef to Japan, the U.S. beef producer is paid with
(a) euros, or any other third currency.
(b) dollars.
(c) yen, the Japanese currency.
(d) international monetary credits.

Answer: B

Question. With the globalization of markets, the tastes and preferences of consumers world-wide are:
(a) becoming similar to the tastes and preferences of American consumers.
(b) converging upon a global norm.
(c) being encouraged by multinational organizations to become increasingly similar.
(d) so different that they can be ignored by international organizations.

Answer: B

Question. Which organisations strain on the liberalisation of foreign investment and foreign trade?
(a) International Monetary Fund
(b) World Health Organisation
(c) World Trade Organisation
(d) International Labour Organisation

Answer: C

Question. If Japan and Pakistan start free trade, difference in wages in two countries will:
(a) Increase
(b) Decrease
(c) No effect
(d) Double

Answer: B

Question. Which among the following are important bodies of WTO?
i. Dispute settlement body
ii. NAFTA
iii. Trade Policy Review Body
iv. ASEAN
v. Council for Trade in Goods
vi. Council for trade related aspects of Intellectual property rights
vii. GATT
An appropriate combination is
(a) (i), (ii), (iii), (iv)
(b) (ii), (iii), (iv), (v)
(c) (i), (iii), (v), (vii)
(d) (iv), (v), (vi), (vii)

Answer: C

Question. 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

Answer: A

Question. On the basis of the size and composition of external debt, world bank has classified India as a
(a) heavily indebted country
(b) moderate indebted country
(c) Less indebted country
(d) Severely indebted country.

Answer: B

Question. Which of the following represents a company’s effort to identify and categorize groups of customers and countries according to common characteristics?
(a) Global positioning
(b) Global market segmentation
(c) Global targeting
(d) Global marketing research

Answer: B

Question. Which institute supports investments and foreign trade in India?
(a) International Monetary Fund (IMF)
(b) World Trade Organisation (WTO)
(c) World Bank
(d) International Labour Organisation (ILO)

Answer: B

Question. India has witnessed a number of acute problems immediately prior to the implementation of economic reforms in the early 1990s. Among the following, which one was severe and unmanageable?
(a) Industrial backwardness
(b) Balance of payments crisis
(c) Backwardness of agriculture
(d) Shortage of food grains

Answer: B

Question. According to the concept of the value chain, of an international firm is profitable if:
(a) the value it commands exceeds the costs involved in creating the product
(b) the value it commands is lower than the costs involved in creating the product
(c) it operates in global industries
(d) the value it commands equals the costs involved in creating the product.

Answer: A

Question. A letter of credits means
(a) A bank agreeing to accept and pay on due date
(b) A letter containing conditions of credit purchase or sale
(c) A letter sent by exporter to importer sanctioning credit dial.
(d) A letter sent by importer to exporter sanctioning credit deal

Answer: A

Question. When Safeway supermarkets in the United States buys strawberries from Mexico,
(a) it must use dollars to pay Mexican farmers.
(b) it may use any currency it chooses.
(c) it must use pesos to pay Mexican farmers.
(d) the transaction shows up in the U.S. capital account.

Answer: C

Question. Typically, the last step in the internationalization process is:
(a) Licensing
(b) Exporting
(c) Wholly owned subsidiaries
(d) Foreign Direct Investment

Answer: A

Question. The main reason behind MNCs investments are
(a) To benefit foreign countries
(b) To provide financial support to the country’s government
(c) For the welfare of underprivileged people.
(d) To increase the assets and earn profits.

Answer: D

Question. The balance of payments account is conventionally divided into
(a) Current Account and Capital Account
(b) Visible Account and Invisible Account
(c) Long-term capital Account and short term capital account
(d) None of the options

Answer: A

Question. Amalgamation and rapid unification between countries can be identified as
(a) Globalisation
(b) Liberalisation
(c) Socialisation
(d) Privatisation

Answer: A

Question. Export-Import bank of India was established in ?
(a) 1981
(b) 1982
(c) 1983
(d) 1984

Answer: B

Question. The main reason behind MNCs investments are
(a) To benefit foreign countries
(b) To provide financial support to the country’s government
(c) For the welfare of underprivileged people.
(d) To increase the assets and earn profits.

Answer: D

Question. Which country has the highest inflation rate in the world?
(a) South Sudan
(b) Venezuela
(c) Argentina
(d) Iran

Answer: B

Question. A country records its international finance accounts in it’s
(a) balance of payments accounts.
(b) import/export log accounts.
(c) trade payments accounts.
(d) net exports payments account.

Answer: A

Question. Globalisation has improved in the living structure of
(a) All the people
(b) Workers in developing countries
(c) People in developed countries
(d) None of the options.

Answer: A

Question. Which of the following questions do companies NOT need to consider before deciding to export?
(a) Is exporting consistent with other company goals?
(b) What demands will be exporting place on its key resources and how will these demands be met?
(c) Are the expected benefits worth the costs, or would company resources be better used for developing new domestic business?
(d) What is the variability of the home-country’s import tariffs?

Answer: D

Question. Physical delivery of foreign exchange has to lake place in case of
(a) Forward Market
(b) Spot market
(c) Future market
(d) Options market

Answer: B

Question. Tax on imports can be treated as
(a) Collateral
(b) Trade Barriers
(c) Foreign Trade
(d) Terms of Trade

Answer: B

Question. When management believes or assumes that the home country is superior and the needs of the home country are most relevant in terms of doing business internationally, then management is thought to have a(n) _____________________ business orientation.
(a) Polycentric
(b) Regionocentric
(c) Geocentric
(d) Ethnocentric

Answer: D

Question. Which Indian industries have been hit by globalization?
(a) Cement
(b) Jute
(c) Toy making
(d) Information Technology (IT)

Answer: C

Question. Which one among the following is the correct descending sequence of India’s import of commodities in terms of value?
(a) Precious metals and stones – Electronic goods – Capital goods – Fertilizers
(b) Fertilizers – Precious metals and stones – Electronic goods – Capital goods
(c) Capital goods – Electronic goods – Precious metals and stones – Fertilizers
(d) Electronic goods – Capital goods – Fertilizers – Precious metals and stones

Answer: A

Question. Within an international context, what are ‘economies of scope’ synonymous with?
(a) Decreased cost per unit of output.
(b) Buying components in bulk.
(c) Reusing a resource from one business/country in additional businesses/countries.
(d) All of the options.

Answer: D

Question. Which organisations strain on the liberalisation of foreign investment and foreign trade?
(a) International Monetary Fund
(b) World Health Organisation
(c) World Trade Organisation
(d) International Labour Organisation

Answer: C

Question. Foreign Exchange and Foreign currencies in India are governed by
(a) RBI
(b) Banking Regulation Act
(c) FEMA Act
(d) SEBI Act

Answer: C

Question. Net exports equal:
(a) Exports x Imports
(b) Exports + Imports
(c) Exports – Imports
(d) Exports of services only

Answer: C

Question. 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 options

Answer: D

Question. Which among the following products is usually not exported from India?
(a) Wheat
(b) Rice
(c) Sugar
(d) Pulses

Answer: D