Internal Assessment Test On International Business
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- 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 aboveExplanation
Companies go global for a variety of reasons. One reason is to pursue a growth strategy, as expanding into international markets can provide new opportunities for sales and revenue. Another reason is to gain a profit advantage, as some markets may offer higher profit margins or lower production costs. Additionally, companies may go global due to limitations in their domestic market, such as saturation or intense competition. Finally, going global can also provide economies of scale, allowing companies to benefit from increased production efficiency and cost savings. Therefore, all of the above reasons contribute to why companies choose to expand globally.Rate this question:
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- 2.
What does PESTEL stand for?
- A.
Political, Economical, Social, Technical, Ecological, Legal
- B.
Political, Economical, Social, Technical, Environmental, Legal
- C.
Political, Economical, Social, Technological, Environmental, Legal
- D.
Psychological, Economical, Social, Technical, Ecological, Legal
- E.
Psychological, Environmental, Social, Technical, Ecological, Legal
Correct Answer
C. Political, Economical, Social, Technological, Environmental, LegalExplanation
PESTEL stands for Political, Economical, Social, Technological, Environmental, Legal. This framework is used to analyze the external macro-environmental factors that can impact an organization or industry. It helps businesses identify and understand the various factors and trends that may affect their operations, decision-making, and overall success. By considering these factors, organizations can make informed strategic decisions and adapt to changes in the external environment.Rate this question:
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- 3.
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 DepositsExplanation
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 strict privacy laws and banking secrecy. While individuals and organizations may choose to deposit their money in Swiss banks for various reasons, such deposits do not fall under the traditional categories of foreign direct investment (FDI), foreign institutional investment (FII), investments from non-residents, or World Bank/ADB aided projects, which involve more active forms of investment in different sectors of the economy.Rate this question:
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- 4.
Which of the following country is not a CIVETS country?
- A.
South Korea
- B.
Indonesia
- C.
Turkey
- D.
Vietnam
- E.
Columbia
Correct Answer
A. South KoreaExplanation
South Korea is not a CIVETS country because CIVETS is an acronym that represents Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. South Korea is not included in this group of countries.Rate this question:
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- 5.
IBRD is the original name for .....................?
- A.
IMF
- B.
World Bank
- C.
ITC
- D.
WTO
- E.
Indian Bank for Rural Development
Correct Answer
B. World BankExplanation
IBRD, which stands for International Bank for Reconstruction and Development, is indeed the original name for the World Bank. The World Bank was established in 1944 at the Bretton Woods Conference with the primary goal of providing financial and technical assistance for the reconstruction of war-torn Europe and the development of other countries. Over time, the World Bank expanded its focus to include poverty reduction and sustainable development in developing countries around the world. The International Monetary Fund (IMF), on the other hand, is a separate international organization that primarily focuses on promoting global monetary cooperation, stability, and economic growth.Rate this question:
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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 & Acquisition
- E.
Resource sharing arrangement
Correct Answer
C. Wholly Owned Subsidiary CompanyExplanation
A strategic alliance is a cooperative agreement between two or more organizations to achieve mutual benefits. The options listed are all entry strategies that can be used to form strategic alliances, except for a wholly owned subsidiary company. A wholly owned subsidiary is a company that is completely owned and controlled by another company, which is not a form of strategic alliance as it does not involve cooperation or partnership with another organization.Rate this question:
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- 7.
Who is the author of the book "The Borderless World"?
- A.
Michael Porter
- B.
Amartya Sen
- C.
Thomas Friedman
- D.
Kenichi Ohmae
- E.
Adam Smith
Correct Answer
D. Kenichi OhmaeExplanation
The correct answer is Kenichi Ohmae. Kenichi Ohmae is the author of the book "The Borderless World".Rate this question:
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- 8.
Foreign investment in an industry that provides inputs for a firm’s operation or in an industry that sells outputs of the firm is known as ...................
- A.
Vertical FDI
- B.
Horizontal FDI
- C.
Flow of FDI
- D.
Stock of FDI
- E.
None of the above
Correct Answer
A. Vertical FDIExplanation
Vertical FDI refers to foreign investment in an industry that provides inputs for a firm's operation or in an industry that sells outputs of the firm. This type of investment involves the integration of different stages of production within the value chain. It allows the firm to have control over the entire production process, from sourcing raw materials to distributing the final product. Vertical FDI can help the firm achieve cost savings, improve efficiency, and gain a competitive advantage in the market.Rate this question:
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- 9.
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 lawsExplanation
Environmental protection laws are a type of non-tariff barrier because they are regulations imposed by a country to protect its environment and natural resources. These laws can include restrictions on the importation of certain products or require specific environmental standards to be met by imported goods. By implementing these laws, countries can limit the entry of certain products into their markets, thereby acting as a barrier to trade. Import duties, ad valorem tariffs, protective taxation, and anti-dumping duties, on the other hand, are all types of tariff barriers, as they involve the imposition of taxes or duties on imported goods.Rate this question:
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- 10.
Which of the following is a similarity between international and domestic marketing?
- A.
Identical political factors
- B.
Comparable financial systems
- C.
Similar market characteristics
- D.
Equal risk factors
- E.
Aims at satisfying the needs of customers
Correct Answer
E. Aims at satisfying the needs of customersExplanation
The correct answer is "Aims at satisfying the needs of customers." Both international and domestic marketing have the same objective of meeting the needs and wants of customers. This is because marketing, whether it is done on a global or local scale, revolves around identifying, understanding, and satisfying customer needs in order to create value and generate sales.Rate this question:
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- 11.
The important social factors that affect the international marketing are ..................
- A.
Language of the country
- B.
Culture of the country
- C.
Environment & climate of the country
- D.
Ethnic factors of the country
- E.
All of the above
Correct Answer
E. All of the aboveExplanation
The important social factors that affect international marketing include the language, culture, environment and climate, as well as ethnic factors of the country. These factors play a significant role in shaping consumer behavior, preferences, and buying decisions. Language barriers can affect communication and advertising effectiveness, while cultural differences influence product preferences and marketing strategies. The environment and climate can impact product suitability and demand, and ethnic factors can influence consumer behavior and market segmentation. Therefore, all of these factors collectively affect international marketing.Rate this question:
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- 12.
Some of the benefits that a company enjoys after acquiring globalisation are ...............
- A.
Increased economy of scale of its products
- B.
Provides a good position in the global market
- 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 aboveExplanation
Globalisation offers several benefits to companies. Firstly, it allows them to achieve an increased economy of scale for their products. This means that as companies expand their operations globally, they can produce and sell more units, leading to cost savings and improved profitability. Secondly, globalisation provides companies with a good position in the global market. By entering new markets, companies can access a larger customer base and increase their market share. Thirdly, globalisation allows companies to combine product development, marketing, and purchasing activities in different countries. This enables them to leverage the strengths and resources of different markets, leading to improved efficiency and competitiveness. Lastly, globalisation promotes standardisation of operations and processes, which can result in streamlined operations, cost savings, and improved quality. Therefore, all of the above benefits can be enjoyed by a company after acquiring globalisation.Rate this question:
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- 13.
Which of the following is not a Driver of Globalisation?
- A.
Emergence of new markets
- B.
Emergence of regional blocs
- C.
Increasing gap between the rich and the poor
- D.
Falling barriers to trade and investment
- E.
Technological innovation
Correct Answer
C. Increasing gap between the rich and the poorExplanation
The increasing gap between the rich and the poor is not a driver of globalization because it refers to the unequal distribution of wealth within a country, rather than the interconnectedness and integration of economies on a global scale. The other options, such as the emergence of new markets, regional blocs, falling barriers to trade and investment, and technological innovation, all contribute to the process of globalization by facilitating the flow of goods, services, capital, and information across borders.Rate this question:
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- 14.
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 theory suggests that the competitive advantage of a nation in a specific industry is influenced by four key factors: factor conditions (availability and quality of resources), demand conditions (size and sophistication of domestic market), related and supporting industries (presence of supplier and buyer industries), and firm strategy, structure, and rivalry (competitiveness 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.Rate this question:
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- 15.
The main function of World Bank is ...............
- A.
To provide income for the people who are below the poverty line (BPL)
- B.
To provide long-term capital assistance to its member countries for their reconstruction & development
- C.
To supply food materials for underdeveloped countries
- 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
B. To provide long-term capital assistance to its member countries for their reconstruction & developmentExplanation
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 offers financial support and resources to help countries improve their infrastructure, implement development projects, and stimulate economic growth. By providing capital assistance, the World Bank aims to help member countries overcome challenges and achieve sustainable development.Rate this question:
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- 16.
The major criteria considered for selecting appropriate entry mode in an international market are ..........
- A.
Resource intensity & Control
- B.
Financial capability & operational convenience
- C.
Transfer Risk & Learning
- D.
A & B
- E.
A & C
Correct Answer
E. A & CExplanation
The major criteria considered for selecting an appropriate entry mode in an international market are resource intensity, control, and transfer risk. Resource intensity refers to the amount of resources required to enter and operate in a foreign market. Control refers to the level of control a company wants to have over its operations in the foreign market. Transfer risk refers to the risk of transferring knowledge, technology, and expertise to the foreign market. Therefore, options A and C, which include resource intensity and transfer risk, are the correct criteria for selecting an entry mode in an international market.Rate this question:
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- 17.
Which of the following is not a key investment objective of a multinational company?
- A.
Improve foreign investment climate
- B.
Ensure that the operations of enterprises are in harmony with government policies
- C.
Bring political and economic stability in the country
- 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
C. Bring political and economic stability in the countryExplanation
The key investment objectives of a multinational company 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. This objective may be important for the overall development and success of the multinational company, but it is not listed as one of the key investment objectives in this context.Rate this question:
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- 18.
Factor endowments, Demand conditions, Related and supporting industries and Firm strategy, structure & rivalry are the ....................
- A.
Factors suggested in Heckschler-Ohlin thoery
- B.
Determinants in Product Life Cycle theory by Raymond Vernon
- C.
Components in New Trade Theory
- D.
Determinants of National Competitive Theory by Michael Porter
- E.
Factors affecting trade according to David Ricardo’s Theory of Comparative Advantage
Correct Answer
D. Determinants of National Competitive Theory by Michael PorterExplanation
The factors mentioned in the question are the determinants of National Competitive Theory by Michael Porter. This theory suggests that factor endowments, demand conditions, related and supporting industries, and firm strategy, structure & rivalry are the key factors that determine a nation's competitive advantage in international trade. These factors shape the competitiveness of industries within a country and influence their ability to compete globally.Rate this question:
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- 19.
The important benefits of FDI to host countries include ..................
- A.
Return on Investment & Export-Import effects
- B.
Employment effects & Resource-transfer effects
- C.
Effects on competition and growth in the country & Balance of Payment effects
- D.
B & C
- E.
A & B
Correct Answer
D. B & CExplanation
The important benefits of FDI to host countries include employment effects and resource-transfer effects, as well as effects on competition and growth in the country and balance of payment effects. FDI can lead to job creation and skill development in the host country, as well as the transfer of technology, knowledge, and managerial expertise. It can also stimulate competition and innovation, leading to economic growth. Additionally, FDI can contribute to the host country's balance of payments by increasing exports and reducing imports.Rate this question:
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- 20.
The current Foreign Trade Policy of India is ..................
- A.
Foreign Trade Policy 2009-2014
- B.
Foreign Trade Policy 2010-2015
- C.
Foreign Trade Policy 2011-2016
- D.
Foreign Trade Policy 2012-2017
- E.
Foreign Trade Policy 2013-2018
Correct Answer
A. Foreign Trade Policy 2009-2014Explanation
The correct answer is Foreign Trade Policy 2009-2014. This is because the question is asking for the current Foreign Trade Policy of India, and the given options are different policies from different years. Since the question does not specify a particular year, we can assume that the current policy is the most recent one, which is the Foreign Trade Policy 2009-2014.Rate this question:
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Current Version
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Nov 16, 2023Quiz Edited by
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Nov 05, 2014Quiz Created by
Sudeep B.
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