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CBSE Questions for Class 11 Commerce Business Studies International Business Quiz 8 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
International Business
Quiz 8
The principles of comparative advantage about international trade are laid down by _______.
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David Ricardo
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Adam Smith
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Amartya Sen
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Karl Marx
Explanation
David Ricardo
developed the classical theory
of comparative advantage
in 1817 to explain why countries engage in
international trade
even when one country's workers are more efficient at producing every single good than workers in other countries.
Theory of Absolute Advantage of international trade is propounded by _______.
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Adam Smith
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David Ricardo
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Peter Drucker
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Albert
Explanation
Adam Smith
has sometimes been caricatured as someone who saw no role for government in economic life. In fact, he
believed
that government
had
an important role to play.
Smith's
writings are both an inquiry into the science of economics and a policy guide for realizing the wealth of nations.
Which of the followings are called Brettonwoods Twins?
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IMF & International Bank for Reconstruction and Development (IBRD)
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IMF & World Trade Organisation
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IBRD & World Trade Organisation
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None of the above
Which of the following institution is associated with Dunkel Proposals?
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World Bank
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International Monetary Fund
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World Trade Organization
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United Nations Organization
International trade enhances the domestic competitiveness.
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True
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False
Explanation
Company competition, or
competitiveness
, pertains to the ability and performance of a firm, sub-sector, or country to sell and supply goods and services in a given market, in relation to the ability and performance of other firms, sub-sectors, or countries in the same market.
Hence, the above statement is true.
The ________ Round was officially launched at the WTOs Fourth Ministerial Conference in Qatar, in November 2001.
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Uruguay
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Doha
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Geneva
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Greece
Bretton Woods conference agreed upon having some arrangement among themselves so as to liberalise the world. The arrangement is known as __________.
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Tariff
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Customs
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International Trade Organization
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General Agreement for Tariffs and Trade
_______ often enable growth without having to borrow funds or look for outside investors.
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Contract manufacturing
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Joint ventures
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Licensing
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Wholly Owned Subsidiaries
Explanation
A Joint Venture is a kind of business arrangement, wherein two or more firms come together to work on the same project, to fulfill a specific purpose such as accomplishing a task or project. In this venture sometimes there is no requirement to borrow funds from outsiders. The following are the features of Joint Venture:
1. Two or more firms come to an agreement.
2. Firms pool their resources like capital, manpower, technical know-how
3. To share of profit and loss
4. To make optimum utilization of resources.
Thus the correct answer is B.
Which is the first step in the process of Contract Manufacturing?
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Contract manufacturer manufactures and reports progress to the original equipment manufacturer
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Customer places a sales order
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Product shipped on the customer's request.
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Manufacturing is outsourced partially to a contract manufacturer.
Explanation
A contract manufacturer is a manufacturer that contracts with a firm for components or products. It is a form of outsourcing. A contract manufacturer performing packaging operations is called co packer or a contract packager.
Joint ventures are especially popular with businesses operating in different countries, eg within the transport and travel industries.
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True
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False
Explanation
It is in all the sectors including IT, MEDIA ,Food chains etc
Which of the following industry(ies) is/are example(s) of Contract Manufacturing?
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Defense
0%
Medical
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Telecommunications
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All of the above
Explanation
Contract manufacturing
is an approach to international marketing in which a business pays, a foreign business to
manufacture
its product and market it in a foreign country, under the domestic businesses' name. For
example
, Nike use
contract manufacturers
in South East Asia to produce their sporting goods.
Contract manufacturing is a business process in which an organization known as ____________ outsources manufacturing to another organization.
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Contract Manufacturer
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Original Equipment Manufacturer (OEM)
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Order Manager
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None of the above
Explanation
OEM
(pronounced as separate letters) is short for the
original equipment manufacturer
, which is a somewhat misleading term used to describe a company
that has a special relationship with computer and IT producers.
OEMs
are
manufacturers
who resell another
company's
product under their own name and branding.
A joint ownership venture may be brought about in which of the following way(s)?
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Foreign investor buying an interest in a local company.
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Local firm acquiring an interest in an existing foreign firm.
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Both the foreign and local entrepreneurs jointly forming a new enterprise.
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All of the above
Explanation
A
joint venture
(JV) is a business entity created by two or more parties, generally characterised by shared
ownership
, shared returns and risks, and shared governance.Most
joint ventures
are incorporated, although some, as in the oil and gas industry, are "unincorporated"
joint ventures
that mimic a corporate entity.
Which of the following is/are the advantage(s) of contract manufacturing?
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There is hardly any investment risk involved in the foreign countries.
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It helps international firms in getting products manufactured or assembled at lower costs.
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Local producers in foreign countries also gain from contract manufacturing.
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All of the above
Explanation
A contract manufacturing company may offer significant cost advantages over an organization's internal production facilities. Because contract
manufacturing companies will specialize in developing certain kinds of products, it can start a high-volume production line while implementing all of its' cost-saving measures.
Flextronics Corporation is a famous name in the field of Contract Manufacturing.
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True
0%
False
Explanation
Flex Ltd. is an American multinational technological manufacturer. It is the third largest global electronics manufacturing services, original design manufacturer company by revenue, behind only Taiwan's Pegatron to original equipment manufacturers.
Securities future value is Rs 1, 000, 000 and present value of securities is Rs 500, 000 with an interest rate of 4.5%, 'N' will be ____________.
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16.7473 years
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0.0304 months
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15.7473 years
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0.7575 years
_________ is one form of outsourcing that allows companies to improve their production capability, get new services they cant manufacture themselves or reduce their production costs.
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Export
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Import
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Contract manufacturing
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None of the above
Explanation
A
contract manufacturing
company may offer significant cost
advantages
over an organization's internal
production
facilities.Because
contract manufacturing
companies will specialize in developing certain kinds of products, it can start a high-volume
production
line while implementing all of its' cost saving measures
A company using a contract manufacturer in a low-cost country, for example, may incur shipping costs that cancel out any unit cost advantages.
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True
0%
False
Explanation
Contract manufacturing
allows
a company
to
use
the products or services that are manufactured by another external production
company
, The client will then take that product or service and
use
their own customer service, marketing, and packaging to sell the goods.
Hence, the above statement is true.
In ________, a firm itself approaches the overseas buyers/ suppliers and looks after all the formalities related to exporting/importing activities.
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direct exporting/importing
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indirect exporting/importing
0%
contract manufacturing
0%
none of the above
Explanation
A situation in which a company sells its products directly to customers in another country without using another person or organisation to make arrangements for them, or a product that is sold in this way: The
direct export
of goods involves certain procedures.
______ is used to establish the origin of the product and is issued by the Chamber of Commerce of the Exporters country.
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Certificate of Origin
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Bill of exchange
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Bill of Lading
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Airway bill
Explanation
A certificate of origin is a document used in international trade. In a printed form or as an electronic document, it is completed by the exporter and certified by a recognized issuing body, attesting that the goods in a particular export shipment have been produced, manufactured, or processed in a particular country.
Mobility of factors of production for conducting international business is ________.
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free
0%
restricted
0%
barred
0%
none of the above
Explanation
Economists divide the factors of production into four categories:
land
, labor, capital, and entrepreneurship. The first factor of production is land
, but this includes any natural resource used to produce goods and services.
For importing or exporting, the business or individual must obtain _________.
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Commercial invoice
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Import Export Code
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Airway bill
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Bill of Lading
Explanation
IMPORTER EXPORTER
CODE
( in short
IEC
) is a ten digit number granted by Directorate General of Foreign Trade under Ministry of Commerce and Industry, to any bonafide person/ company for carrying out
import
/
export
.
International business in the form of Foreign investment ________.
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includes investments of funds abroad
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can be direct investments
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can be portfolio investments
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all of the above
Explanation
A foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control
Exporting/importing is the most preferred way for business firms when they are getting initially involved with international business.
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True
0%
False
Explanation
An
import
in the receiving country is an
export
from the sending country.
Importation
and exportation are the defining financial transactions of international trade. In international trade, the
importation
and exportation of goods are limited by import
quotas and mandates from the customs authority.
Hence, the above statement is true.
Identify the description of domestic business from the the following.
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It serves many countries at the same time.
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Research reliability varies from country to country.
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The quality standards of products and services provided is relatively low.
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It is subject to rules, law taxation, tariff and quotas of many countries.
Explanation
Domestic Business
is defined as the
business
whose economic transaction is conducted within the geographical limits of the country. International
Business
refers to a
business
which is not restricted to a single country, i.e. a
business
which is engaged in the economic transaction with several countries in the world.
Identify the limitation(s) of importing/ exporting form of international business.
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Exporting/importing involves additional packaging, transportation and insurance costs.
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Exporting is not a feasible option when import restrictions exist in a foreign country.
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Export firms basically operate from their home country.
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All of the above
Explanation
Disadvantages
Economic dependence: Too much dependence on imports may undermine the economy of a country.
Restricted growth of home industries: Foreign trade may discourage the growth of domestic industries.
Misuse of natural resources.
Political exploitation.
Import of harmful goods.
Rivalry among nations.
Invasion of culture.
The company that hires the contract manufacturer should keep in mind that the manufacturer has other customers. This is identified from which of the following limitations?
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Lack of Control
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Relationships
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Quality Concern
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Capacity Concerns
How can a foreign company set up business operations in India? Select the correct code given below:
By setting up a company under the Companies Act, 2013 as a Joint Venture or a Wholly Owned Subsidiary.
By setting up a Liaison Office/ Representative Office or a Project Office or a Branch Office of the foreign company.
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Only 1
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Only 2
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1 and 2
0%
Neither 1 nor 2
Explanation
Liaison Office/Representative Office or a Project Office or a Branch Office of the foreign company operate under the Foreign Exchange Management (Establishment in India of branch Office or Other Place of Business) Regulations, 2000.
One of the items is not related with e-banking ___________.
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Demand draft
0%
SPMS
0%
ECS
0%
ATM
Ever year many small companies get _______ up by large multinationals.
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burnt
0%
swallowed
0%
digested
0%
drowned
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