MCQ ON INTERNATIONAL BUSINESS PART 3

1.  The main promoter of international trade liberalisation

  1. IBRD
  2. NAFTA
  3. SAARC
  4. GATT- WTO
4. GATT- WTO

WTO is the promoter of Interantional Trade Liberalisation. WTO set and enforce rules for international trade

2. The most common trade barrier faced by a multinational company is the

  1. Embargo
  2. Quota
  3. Sales tax
  4. Tariff
4. Tariff

A tariff is a tax imposed by one country on the goods and services imported from another country. It is imposed by almost all the countries of the world

3. Exchange Rate System where the Central Bank intervenes to smoothen out the exchange rate fluctuations is termed as

  1. Free float
  2. Clean float
  3. Managed float
  4. Fixed rate system
3. Managed Float

The central bank manages the exchange rate fluctuations through various measures.

4. Factor Endownment Theory of International Trade was propounded by

  1. David Ricardo
  2. J. S. Mill
  3. C.P. Kindleberges
  4. Bertil-Ohlin
4. Bertil-Ohlin

5. Which of the following is not a force in the Porter Five Forces model?

  1. Buyers
  2. Supplier
  3. Complementry Products
  4. Industry rivalry
3. Complementry Products

Porter’s five forces are: Competition in the industry, Potential of new entrants into the industry, Power of suppliers, Power of customers and Threat of substitute products

6. According to this theory, the holdings of a country’s treasure primarily in the form of gold
constituted its wealth.

  1. Gold Theory
  2. Ricardo Theory
  3. Mercantilism
  4. Hecksher Theory
3. Mercantilism

Theory of mercantiliam states the government seeks to regulate the economy and trade in order to promote domestic industry – often at the expense of other countries. Mercantilism is associated with policies which restrict imports, increase stocks of gold and protect domestic industries. that

7. Which is the right sequence of stages of Internationalization

  1. Domestic, Transnational, Global, International, Multinational
  2. Domestic, International, Transnational, Multinational, Global
  3. Domestic, Multinational, International, Transnational, Global
  4. Domestic, International, Multinational, Global, Transnational

4. Domestic, International, Multinational, Global, Transnational

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

  1. Polycentric Approach
  2. Regiocentric Approach
  3. Ethnocentric Approach
  4. Geocentric Approach
Regiocentric Orientation is an approach adopted by a firm wherein it adopts a marketing strategy across a group of countries, which have been grouped on the basis of their market characteristics; i.e., the market characteristics of these countries would be more or less similar.

9. The Theory of Absolute Cost Advantage is given by

  1. David Ricardo
  2. Adam Smith
  3. F W Taylor
  4. Ohlin and Heckscher
2. Adam Smith

The concept of absolute advantage was first introduced in 1776 in the context of international trade by Adam Smith, a Scottish philosopher considered the father of modern economics.

10. The theory of comparative cost advantage is given by

  1. David Ricardo
  2. Adam Smith
  3. F W Taussig
  4. Ohlin and Heckshe
1. David Ricardo

The law of comparative advantage is popularly attributed to English political economist David Ricardo and his book “On the Principles of Political Economy and Taxation” written in 1817

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