International Business - I(11th Grade > Business Studies ) Questions and answers for exam Preparation

11th Grade > Business Studies

INTERNATIONAL BUSINESS - I MCQs

Total Questions : 30 | Page 3 of 3 pages

Question 21.

___ is the exchange of capital goods and services across the international borders and different nations of the world.

Discuss Question

Answer: Option A. ->
:

Question 22.

An export is a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade.

True
False

Discuss Question

Answer: Option A. -> True
:
A

True. An export is a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade.

Question 23.

Which of the following statement(s) is/are true about Wholly-owned subsidiaries?

1. There is no risk-sharing in the case of wholly owned subsidiaries.

2. The parent firm needs to invest 100 percent of the equity capital in the foreign firm. Hence, it is not suitable for small or medium-sized firms.

Both statements are true
Only statement 1 is true
Only statement 2 is true
None of the statements is true

Discuss Question

Answer: Option A. -> Both statements are true
:
A

Both statements are true. There is no risk-sharing in the case of wholly owned subsidiaries. Since, the investment is completely done by the parent firm, the losses occurring from the potential failure of the company has to be borne by the parent company itself.

Question 24.

US and European firms outsource customer and IT support jobs to India because of the better quality of human capital available in India.

True
False

Discuss Question

Answer: Option B. -> False
:
B

False. US and European firms outsource customer and IT support jobs to India because of the cheap human capital available in India.

Question 25.

Trade in goods includes services, capital transfers, and foreign investments.

False
True
Manufacture and assembly of products can be done cheaply by outsourcing to countries where costs of production are low.
There is minimal investment in foreign countries and hence the risk associated with foreign investments is also minimal.

Discuss Question

Answer: Option A. -> False
:
A

False. Trade in goods only includes goods.

Question 26.

India is the seventh largest economy in the world, however, it is only the tenth largest exporter, in terms of value.

True
False
Manufacture and assembly of products can be done cheaply by outsourcing to countries where costs of production are low.
There is minimal investment in foreign countries and hence the risk associated with foreign investments is also minimal.

Discuss Question

Answer: Option B. -> False
:
B

False. India is the seventh largest economy in the world however it is only the sixteenth largest exporter, in terms of value.

Question 27.

Centralised control in MNCs implies control exercised by ___.

Branches
Subsidiaries
Headquarters
Parliament

Discuss Question

Answer: Option C. -> Headquarters
:
C

Centralised control in MNCs implies control exercised by headquarters.

Question 28.

Which of the following is an advantage of licensing and franchising?

There is a lower risk of takeovers or interventions by the foreign government.
It enables international firms to produce goods on a large scale without investing in setting up production facilities.
Manufacture and assembly of products can be done cheaply by outsourcing to countries where costs of production are low.
There is minimal investment in foreign countries and hence the risk associated with foreign investments is also minimal.

Discuss Question

Answer: Option A. -> There is a lower risk of takeovers or interventions by the foreign government.
:
A

There is a lower risk of takeovers or interventions by the foreign government since the business is managed by a local franchisee.

Question 29.

Which of the following is the best explanation of a joint venture?

A general business partnership.
The merging of two or more businesses to pursue a business venture.
A partnership of businesses formed to engage in a short term business venture together.
A group of two or more persons or entities that come together on a temporary basis to pursue a joint business activity for profit.

Discuss Question

Answer: Option B. -> The merging of two or more businesses to pursue a business venture.
:
B

Joint venture is the merging of two or more businesses to pursue a business venture.

Question 30.

India allows foreign firms to make 100 percent equity investments in many sectors.

True
False
Only statement 2 is true
None of the statements is true

Discuss Question

Answer: Option B. -> False
:
B

False. India has placed restrictions on foreign firms from making 100 percent equity investments in many sectors. For example, the maximum stake which can be owned by a foreign company in a civil aviation firm in India is 49%.