Online MCQ On International Business : MBA @ Macfast

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Questions: 20 | Attempts: 303

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Online MCQ On International Business : MBA @ Macfast - Quiz

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Questions and Answers
  • 1. 

    Why do companies go global?

    • A.

      Growth Strategy

    • B.

      Profit Advantage

    • C.

      Limitations in domestic market

    • D.

      Economies of Scale

    • E.

      All of the above

    Correct Answer
    E. All of the above
    Explanation
    Companies go global for a variety of reasons. One reason is to pursue a growth strategy, as expanding into new markets can help increase sales and revenue. Going global also provides companies with a profit advantage, as they can tap into new customer bases and potentially lower production costs. Additionally, limitations in the domestic market, such as saturation or intense competition, may prompt companies to explore international markets. Lastly, going global can offer economies of scale, allowing companies to benefit from increased production and distribution efficiencies. Therefore, all of the given reasons are valid explanations for why companies go global.

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  • 2. 

    Which of the following number is a pre-requisite for any exporting/importing company? 

    • A.

      CIE

    • B.

      IEC

    • C.

      ECI

    • D.

      CIA

    • E.

      CIC

    Correct Answer
    B. IEC
    Explanation
    The correct answer is IEC. IEC stands for Importer-Exporter Code, which is a unique 10-digit number issued by the Directorate General of Foreign Trade (DGFT). It is a mandatory requirement for any company involved in importing or exporting goods or services from India. The IEC number acts as an identification for the company and is used for customs clearance and documentation purposes. Without an IEC number, a company cannot engage in international trade activities.

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  • 3. 

    What does PESTEL stand for? 

    • A.

      Political, Economical, Social, Technical, Ecological, Legal

    • B.

      Political, Ecological, Social, Technical, Environmental, Legal

    • C.

      Political, Economical, Social, Technological, Environmental, Legal

    • D.

      Political, Economical, Social, Technological, Environmental, Legal

    • E.

      Political, Economical, Social, Technological, Environmental, Legal

    Correct Answer
    C. Political, Economical, Social, Technological, Environmental, Legal
    Explanation
    PESTEL stands for Political, Economical, Social, Technological, Environmental, and Legal. This framework is used to analyze the external macro-environmental factors that can impact an organization's operations and decision-making. It helps in identifying and understanding the various external factors that can influence an organization's performance and strategy development.

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  • 4. 

    Which of the following country is not a CIVETS country?

    • A.

      South Korea

    • B.

      Vietnam

    • C.

      Turkey

    • D.

      Indonesia

    • E.

      Columbia

    Correct Answer
    A. South Korea
    Explanation
    South Korea is not a CIVETS country because CIVETS is an acronym for Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. Therefore, South Korea is not included in this group of countries.

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  • 5. 

    IBRD is the original name of? 

    • A.

      IMF

    • B.

      WTO

    • C.

      ITC

    • D.

      World Bank

    • E.

      Indian Bank for Rural Development

    Correct Answer
    D. World Bank
    Explanation
    IBRD is the original name of the World Bank. The International Bank for Reconstruction and Development (IBRD) was established in 1944 along with the International Monetary Fund (IMF) at the Bretton Woods Conference. The IBRD's primary purpose was to provide financial assistance for the reconstruction of war-torn countries and to promote economic development in developing nations. Over time, the IBRD evolved into the World Bank Group, which includes other institutions such as the International Development Association (IDA) and the International Finance Corporation (IFC). Therefore, the correct answer is World Bank.

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  • 6. 

    Which of the following is not an entry strategy under the category of "strategic alliances"? 

    • A.

      Marketing Tie-up

    • B.

      Take Over

    • C.

      Wholly Owned Subsidiary Company

    • D.

      Mergers & Acquisitions

    • E.

      Resource sharing arrangement

    Correct Answer
    C. Wholly Owned Subsidiary Company
    Explanation
    A wholly owned subsidiary company is not an entry strategy under the category of "strategic alliances" because it involves a company establishing a new subsidiary in a foreign market and maintaining full ownership and control over it. In strategic alliances, two or more companies collaborate and form a partnership to achieve mutual benefits, such as resource sharing, market access, or technology transfer. Wholly owned subsidiary company is more aligned with a mode of foreign direct investment rather than a strategic alliance.

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  • 7. 

    Which of the following is a similarity between international and domestic marketing?

    • A.

      Identical political factors

    • B.

      Identical political factors

    • C.

      Similar market characteristics

    • D.

      Equal risk factors

    • E.

      Aim at satisfying the needs of customers

    Correct Answer
    E. Aim at satisfying the needs of customers
    Explanation
    The correct answer is "Aim at satisfying the needs of customers". This is a similarity between international and domestic marketing because both types of marketing aim to satisfy the needs of customers. Whether it is in the domestic market or in international markets, the ultimate goal of marketing is to understand and meet the needs and wants of customers in order to create value and generate sales.

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  • 8. 

    Some of the benefits that a company enjoys after acquiring globalisation are:

    • A.

      Increased economy of scale of its products

    • B.

      Possibility of combining product development, marketing and purchasing activities in different countriesIncreased economy of scale of its products

    • C.

      Possibility of combining product development, marketing and purchasing activities in different countries

    • D.

      Standardisation of operations & processes

    • E.

      All of the above

    Correct Answer
    E. All of the above
    Explanation
    The correct answer is "All of the above" because the benefits listed in the options are all advantages that a company can enjoy after acquiring globalization. Increased economy of scale allows the company to produce and sell more products at a lower cost per unit, leading to higher profits. Combining product development, marketing, and purchasing activities in different countries can lead to cost savings and access to new markets. Standardization of operations and processes can improve efficiency and consistency across the company's global operations. Therefore, all of these benefits contribute to the overall advantages of globalization for a company.

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  • 9. 

    Which of the following is not a Driver of Globalisation?

    • A.

      Increasing gap between the rich and the poor

    • B.

      Emergence of new markets

    • C.

      Falling barriers to trade and investment

    • D.

      Emergence of regional blocs

    • E.

      Technological innovation

    Correct Answer
    A. Increasing gap between the rich and the poor
    Explanation
    The increasing gap between the rich and the poor is not considered a driver of globalization because it is a consequence or outcome of globalization, rather than a factor that actively contributes to it. Globalization is driven by factors such as the emergence of new markets, falling barriers to trade and investment, the emergence of regional blocs, and technological innovation. These factors promote the integration and interdependence of economies and societies on a global scale.

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  • 10. 

    The main function of World Bank is:

    • A.

      To provide income for the people who are below the povert line (BPL)

    • B.

      To supply food materials for underdeveloped countries

    • C.

      To provide long-term capital assistance to its member countries for their reconstruction & development

    • D.

      To encourage export of essential goods to developing and underdeveloped member countries

    • E.

      To provide financial assistance to the various non-governmental organisations (NGO) for their projects in eradicating poverty, hunger and unemployment

    Correct Answer
    C. To provide long-term capital assistance to its member countries for their reconstruction & development
    Explanation
    The main function of the World Bank is to provide long-term capital assistance to its member countries for their reconstruction and development. This means that the World Bank helps countries in need by providing them with financial support and resources to improve their infrastructure, economy, and overall development. This assistance is aimed at helping these countries recover from conflicts or disasters, reduce poverty, and promote sustainable development.

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  • 11. 

    Which of the following is not a key investment objective of a multinational country?

    • A.

      Improve foreign investment climate

    • B.

      Bring political and economic stability in the country

    • C.

      Ensure that the operations of enterprises are in harmony with government policies

    • D.

      Strengthen the basis of mutual confidence between enterprises and the societies in which they operate

    • E.

      Enhance contribution of enterprise to sustainable development

    Correct Answer
    B. Bring political and economic stability in the country
    Explanation
    The key investment objectives of a multinational country include improving the foreign investment climate, ensuring that the operations of enterprises are in harmony with government policies, strengthening the basis of mutual confidence between enterprises and the societies in which they operate, and enhancing the contribution of enterprise to sustainable development. However, bringing political and economic stability in the country is not specifically mentioned as a key investment objective.

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  • 12. 

    Which of the following is not a major category of foreign investment?

    • A.

      FDI

    • B.

      FII

    • C.

      Investments from Non Residents

    • D.

      Swiss Bank Deposits

    • E.

      World Bank / ADB aided projects

    Correct Answer
    D. Swiss Bank Deposits
    Explanation
    Swiss Bank Deposits are not considered a major category of foreign investment because they refer to funds deposited in Swiss banks, which are known for their secrecy and confidentiality. While these deposits may involve foreign individuals or entities, they are not typically considered as a form of foreign investment in the same way as FDI, FII, investments from non-residents, or World Bank/ADB aided projects. Foreign Direct Investment (FDI) refers to investments made by foreign companies or individuals in another country, Foreign Institutional Investment (FII) refers to investments made by foreign institutional investors in the stock market, and investments from non-residents and World Bank/ADB aided projects are also forms of foreign investment.

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  • 13. 

    Who is the author of the book "The Borderless World"?

    • A.

      Kenichi Ohmae

    • B.

      Michael Porter

    • C.

      Thomas Friedman

    • D.

      Adam Smith

    • E.

      Amartya Sen

    Correct Answer
    A. Kenichi Ohmae
    Explanation
    Kenichi Ohmae is the author of the book "The Borderless World".

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  • 14. 

    Which of the following is a type of non-tariff barrier?

    • A.

      Import Duties

    • B.

      Environmental protection laws

    • C.

      Ad valorem tariffs

    • D.

      Protective taxation

    • E.

      Anti-dumping duties

    Correct Answer
    B. Environmental protection laws
    Explanation
    Environmental protection laws are a type of non-tariff barrier because they restrict or regulate imports based on environmental considerations. These laws aim to protect the environment and prevent the importation of goods that may harm it. Unlike import duties, ad valorem tariffs, protective taxation, and anti-dumping duties, which are all forms of tariffs or taxes on imports, environmental protection laws do not involve monetary charges but rather impose restrictions or requirements on imported goods based on their environmental impact.

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  • 15. 

    Porter’s Diamond explains: 

    • A.

      Why does a firm achieve international success in a particular industry?

    • B.

      Why does a firm achieve international success in a particular country?

    • C.

      Why does a nation achieve international success in the global economy?

    • D.

      Why does a nation achieve international success in a particular industry?

    • E.

      Why does a nation achieve international success in financial markets?

    Correct Answer
    D. Why does a nation achieve international success in a particular industry?
    Explanation
    Porter's Diamond explains why a nation achieves international success in a particular industry. The framework suggests that the competitiveness of a nation in a specific industry is influenced by four key factors: factor conditions (such as skilled labor and infrastructure), demand conditions (the size and sophistication of the domestic market), related and supporting industries (the presence of supplier and complementary industries), and firm strategy, structure, and rivalry (the competitiveness and management practices of firms within the industry). These factors interact and create a favorable environment for certain industries to thrive in a particular nation, leading to international success in that industry.

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  • 16. 

    The important benefits of FDI to host countries include:

    • A.

      Employment effects & Resource-transfer effects

    • B.

      Return on Investment & Export-Import effects

    • C.

      Effects on competition and growth in the country & Balance of Payment effects

    • D.

      A & B

    • E.

      A & C

    Correct Answer
    E. A & C
    Explanation
    The correct answer is A & C. FDI (Foreign Direct Investment) brings important benefits to host countries in terms of employment effects and resource-transfer effects. FDI can create job opportunities and contribute to the overall economic growth of the country. Additionally, FDI can also have positive effects on competition and growth in the country. It can bring in new technologies, knowledge, and skills, which can enhance productivity and innovation. Furthermore, FDI can also have a positive impact on the balance of payments as it can lead to an increase in exports and decrease in imports.

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  • 17. 

    Whose theory is “Fortune at the Bottom of the Pyramid”?

    • A.

      Philip Kotler

    • B.

      C. K . Prahalad

    • C.

      Jason Stathom

    • D.

      Khushvant Singh

    • E.

      Pythagorus

    Correct Answer
    B. C. K . Prahalad
    Explanation
    The theory "Fortune at the Bottom of the Pyramid" is attributed to C. K. Prahalad. This theory suggests that there are significant business opportunities in serving the needs of the vast population at the bottom of the economic pyramid, who are often overlooked by traditional businesses. Prahalad argued that by targeting this underserved market segment, companies can not only make a positive social impact but also achieve financial success.

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  • 18. 

    The Uruguay Round of negotiations under GATT resulted in the formation of:

    • A.

      International Monetary Fund

    • B.

      International Court for Dispute Settlement

    • C.

      International Trade Organisation

    • D.

      World Bank

    • E.

      World Trade Organisation

    Correct Answer
    E. World Trade Organisation
    Explanation
    The Uruguay Round of negotiations under GATT resulted in the formation of the World Trade Organisation. The GATT (General Agreement on Tariffs and Trade) was a multilateral agreement aimed at reducing trade barriers and promoting international trade. The Uruguay Round, which took place from 1986 to 1994, was a series of negotiations that led to the establishment of the World Trade Organisation in 1995. The World Trade Organisation replaced GATT and expanded its scope to include not only trade in goods, but also trade in services and intellectual property rights. It serves as a forum for member countries to negotiate trade agreements and resolve trade disputes.

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  • 19. 

    Which of the following is an example of direct export mode?

    • A.

      Foreign Sales Branch

    • B.

      Export Commission House

    • C.

      Export Management Company

    • D.

      Export Merchants

    • E.

      Piggyback Marketing

    Correct Answer
    A. Foreign Sales Branch
    Explanation
    A foreign sales branch is an example of direct export mode because it involves establishing a branch or subsidiary in a foreign country to directly sell products or services to customers in that market. This allows for greater control and involvement in the foreign market, as the company has a physical presence and can directly interact with customers and handle sales and distribution. Other options like export commission house, export management company, export merchants, and piggyback marketing involve different forms of indirect exporting, where the company relies on intermediaries or partnerships to handle sales and distribution in the foreign market.

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  • 20. 

    Which of the following role is played by WTO?

    • A.

      Tribunal

    • B.

      Conductor

    • C.

      Trainer

    • D.

      Monitor

    • E.

      All of the above

    Correct Answer
    E. All of the above
    Explanation
    The correct answer is "All of the above." The World Trade Organization (WTO) plays multiple roles including acting as a tribunal to settle trade disputes between member countries, conducting negotiations to promote free trade, providing training and technical assistance to developing countries, and monitoring the implementation of trade agreements. Therefore, all the given options accurately describe the role played by the WTO.

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 25, 2016
    Quiz Created by
    Mac_IB
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