International Trade-I

MCQ Based Questions on Class 11 Business studies for chapter-11 International Trade-I

Find below MCQ Based Questions on Class 11 Business studies for chapter-11 International Trade-I all the MCQ questions are explained with correct answers and explanations. To check the correct answer click on the answer. 

Find MCQ questions for class 11 Business studies-11 International Trade-I

Business Studies - MCQ on International Trade-I

Class XI

Q. 1.Foreign Trade helps each country to make _________ use of natural resources

I. Good

II. Optimal

III. Loss

IV. Better

Answer:

.II. Optimal

Explanation: The resources does not remain idle infact optimal utilization of resources is done because of foreign trade

Q. 2.What is international trade

I. Trade within a country

II. Trade between countries

III. Trade within states

IV. None of these

Answer:

II.Trade between countries

Explanation:International business involves commercial activities that cross national frontiers.

Q. 3.What is international Trade Comprised of

I. Imports

II. Exports

III. Imports and Exports

IV. Goods and services

Answer:

III. Imports and Exports

Explanation When the goods and services are imported and exported then it is called International Trade

Q. 4.What is International Business comprised of:

I. Imports and exports of goods

II. Imports and exports of services

III. Imports and exports of goods & services

IV. All

Answer:

.III. Imports and exports of goods & services

Explanation International Business is a wider concept it includes services such as international travel and tourism, transportation, communication, banking,

Q. 5.What is the major reason underlying trade between nations?

I. Resources are scarce

II. To earn profit

III. Countries cannot produce equally well and cheaply goods and services

IV. Economic Development

Answer:

III.Countries cannot produce equally well and cheaply goods and services

Explanation The appropriate answer among them is that different countries are efficient producing different types of goods and services so the exchange can be beneficial for both the countries

Q. 6.Purchase of goods from one country with the object of selling than to other country is called

I. Import

II. Export

III. Enterport

IV. Indian

Answer:

III.Enterport

Explanation When goods are imported with an objective to export it then it is called Enterport

Q. 7.Contract manufacturing means

I. Taking goods from local manufacturers

II. Outsourcing

III. Manufacturing on a contractual basis

IV. None

Answer:

II.Outsourcing

Explanation Contract manufacturing refers to a type of international business where a firm enters into a contract with one or a few local manufacturers in foreign countries to get certain components or goods produced as per its specifications. Contract manufacturing, also known as outsourcing

Q. 8.What is licensing

I. License is an agreement

II. Permitting another party in a foreign country to produce and sell goods under your trademarks, patents

III. License is issued for convenience

IV. None

Answer:

: II.Permitting another party in a foreign country to produce and sell goods under your trademarks, patents

Explanation:License gives the permission to trade goods and services under their trademark.

Q. 9.What is franchising

I. Permitting another party in a foreign country to run service business

II. Permitting another party in a foreign country to produce and sell goods under your trademarks, patents

III. Franchisee is a representations of main organization

IV. None

Answer:

I. Permitting another party in a foreign country to run service business

Explanation: Franchising is basically a specialized form of licensing in which the franchisor not only sells intangible property to the franchisee, but also insists that the franchisee agrees to abide by strict rules as to how it does business.

Q. 10.What is domestic Business

I. Business transaction taking place within the geographical boundaries of a nation

II. Business transaction taking place outside the geographical boundaries of a nation

III. Business transaction taking place within the geographical boundaries of a state

IV. None

Answer:

.I. Business transaction taking place within the geographical boundaries of a nation

Explanation: Domestic business refers to internal trade which takes place in the geographical boundaries.

Q. 11.What is Foreign Investments

I. Foreign investment involves investments of funds abroad in exchange for financial return.

II. Foreign investment is investing in a particular country

III. Foreign investment means keeping accounts in foreign banks

IV. Foreign investment is investing foreign currency

Answer:

. I.Foreign investment involves investments of funds abroad in exchange for financial return.

Explanation: Foreign Investments are investing funds in foreign market

Q. 12.How foreign trade plays an important role for a country

I. Economic Development

II. Availability of goods

III. Income increases

IV. Standard of living improves

Answer:

.I.Economic Development

Explanation: Basically foreign trade overall economic development takes place optimum utilization of resources, Increase standard of living provides employment opportunities

Q. 13.What is the limitations of Exporting

I. Increases Cost

II. Formalities involved

III. Imports restrictions

IV. All

Answer:

.IV.All

Explanation Exporting increase cost, a lot of formalities are involved so indirect entry is done like franchising.

Q. 14.What is a Joint venture

I. Any form of association which Implies collaboration for more than a Transitory period

II. An independent business by two partners

III. An independent business by two firms

IV. A business which has partners from different industries

Answer:

I. Any form of association which implies collaboration for more than a transitory period

Explanation A joint venture means establishing a firm that is jointly toward by two or more otherwise independent firms

Q. 15.What is wholly owned subsidiaries

I. To exercise full control over their overseas operations.

II. An independent company

III. Acquiring complete franchisee

IV. None

Answer:

I.To exercise full control over their overseas operations.

Explanation: The parent company acquires full control over the foreign company by making 100 percent investment in its equity capital.

Q. 16.What is invisible trade?

I. Trade of services

II. Trade of Goods

III. Trade from one country to other

IV. Import goods to export them

Answer:

I.Trade of services

Explanation: Service exports and imports involve trade in intangibles. It is because of the intangible aspect of services that trade in services is also known as invisible trade.

Q. 17.What is FDI

I. Foreign depository index

II. Foreign dealing implication

III. Foreign Direct Investment

IV. Foreign direct Indication

Answer:

IV.Foreign Direct Investment

Explanation: Direct investment provides the investor a controlling interest in a foreign company. This is otherwise known as Foreign Direct Investment,

Q. 18.What is a portfolio investment?

I. Investment that a company makes into another company by the way of acquiring shares

II. Investment through various companies

III. Investment in various companies

IV. Investment in a given Company

Answer:

I.Investment that a company makes into another company by the way of acquiring shares

Explanation: The investor under portfolio investment does not get directly involved into production and marketing operations. It simply earns an income by investing in shares, bonds, bills, or notes in a foreign country or providing loans to foreign business firms.

Q. 19.When does the domestic manufacturer provide the right to use intellectual property to a producer in a foreign country for a fee

I. Licensing

II. Contract Manufacturing

III. Joint venture

IV. None of these

Answer:

I. Licensing

Explanation: License gives the permission to trade goods and services under their trademark.

Q. 20. Outsourcing of marketing operations in international business is known as

I. Licensing

II. Franchising

III. Contract manufacturing

IV. Joint venture

Answer:

III.Contract manufacturing

Explanation Contract manufacturing refers to a type of international business where a firm enters into a contract with one or a few local manufacturers in foreign countries to get certain components or goods produced as per its specifications. Contract manufacturing, also known as outsourcing

Q. 21. When two or more firms join together to create a new business entity

Which is separate and distinct from its parents it is known as

I. Contract manufacturing

II. Franchising

III. Joint ventures

IV. Licensing

Answer:

III. Joint ventures

Explanation A joint venture means establishing a firm that is jointly toward by two or more otherwise independent firms

Q. 22.. Which of the following is not an advantage of exporting?

I. Easier way to enter

II. comparatively lower international markets risks

III. Limited presence in foreign markets

IV. Less investment requirements

Answer:

III.Limited presence in foreign markets

Explanation Through Franchising a physical presence can be seen in foreign market but through export the presence of a company of goods and services is not present

Q. 23. Which one of the following modes of entry requires higher level of risks?

I. Licensing

II. Franchising

III. Contract manufacturing

IV. Joint venture

Answer:

IV. Joint venture

Explanation Joint venture involves higher level of risks because it is totally a new identity

Q. 24. Which one of the following modes of entry permits greatest degree of

control over overseas operations?

I. Licensing/franchising

II. Wholly owned

III. subsidiary

IV. Contract manufacturing

Answer:

II.Wholly owned

Explanation The companies with long term and substantial interest in the foreign market, when acquire full control over the foreign company by making 100% investment in its equity capital are called wholly- owned subsidiaries.

Q. 25. Which one of the following modes of entry brings the firm closer to

international markets?

I. Licensing

II. Franchising

III. Contract manufacturing

IV. Joint venture

Answer:

I. Licensing

Explanation Permitting another party in a foreign country to produce and sell goods under your trademarks, patents

Q. 26. Which one of the following is not amongst India’s major import items?

I. Textiles and garments

II. Gems and jewellery

III. Oil and petroleum products

IV. Basmati rice

Answer:

IV.Basmati Rice

Explanation: A lot of rice is produced in India because the climate is suitable for rice production

Q. 27. Which one of the following is not amongst India’s major import items?

I. Ayurvedic medicines

II. Oil and petroleum products

III. Pearls and precious stones

IV. Machinery

Answer:

II.Oil and petroleum products

Explanation Oil and petroleum are not found in India and they are generally imported from Gulf Countries

Q. 28. Which one of the following is not amongst India’s major trading partners?

I. USA

II. UK

III. Germany

IV. Korea

Answer:

.IV.Korea

Explanation Korea does comes under the major 11 partners of India

Q. 29 .What is ‘Global Village’?

I. Internal Economy

II. Borderless Economy

III. Village Economy

IV. Domestic Economy

Answer:

.II. Borderless Economy

Explanation The economies of the nations are increasingly becoming borderless. Business today is no longer restricted to the boundaries of the domestic country.

Q. 30.Dealings in foreign currency deals with

I. Foreign Trade

II. Foreign Business

III. National trade

IV. None

Answer:

.II.Foreign Business

Explanation Dealings in foreign currency is a feature of international business

Q. 31.Which one is the primary product which India export to other country

I. Agricultural and allied

II. Textiles including garments

III. Gems and jewellery

IV. Engineering goods

Answer:

I. Agricultural and allied

Explanation Agricultural products are the basic products which India exports

Q. 32.Which one is the secondary product which is exported

I. Agricultural and allied

II. Ores

III. Minerals

IV. Petroleum, crude and related products

Answer:

IV.Petroleum, crude and related products

Explanation This is the secondary product which India export and its main products are agriculture and minerals

Q. 33.What are the benefits of international business to nations?

I. Optimum use of resources

II. Growth of economy

III. Economies of large scale

IV. All

Answer:

IV.All

Explanation Through International Trade resources are used in an optimal manner

Q. 34.To undertake a big project requiring huge capital which mode is suitable

I. Licensing

II. Franchising

III. Contract manufacturing

IV. Joint venture

Answer:

.IV.Joint Venture

Explanation Joint venture makes it possible to undertake a big projects which require huge investments

Q. 35.Dual ownership may lead to conflicts in which form of business

I. Licensing

II. Franchising

III. Contract manufacturing

IV. Joint venture

Answer:

.IV.Joint venture

Explanation There are two companies which collaborate and form a joint venture so it may lead to conflict between the companies

Q. 36.Which is the major product imported in India

I. Capital goods

II. Pearl, precious and semi-precious stones

III. Capital goods

IV. Electronic goods

Answer:

III.Capital Goods

Explanation Capital Goods imported share is 12.1%

Q. 37.Which is the product which is imported very less

I. Coke, coal and briquettes

II. Metal, ferrous ores and metal scrap

III. Professional equipments and optical goods

IV. Edible oils

Answer:

II.Metal, ferrous ores and metal scrap

Explanation It is the main product available in India so very less of it is imported

Q. 38. In Joint Venture how a foreign can contribute

I. Latest technology

II. Manpower

III. Administration

IV. Basis to work

Answer:

I. Latest technology

Explanation The foreign partner can bring the latest technology which may improve work.

Q. 39.What does a franchiser charge for the franchisee

I. Interest

II. Fee

III. Rent

IV. Profit

Answer:

.II. Fee

Explanation The franchiser charges a fee for the franchisee.

Q. 40.Which one of the following is not among the major India’s major import items?

I. Ayurvedic medicines

II. Electronic goods

III. Gold and silver

IV. Machinery

Answer:

II.Electronic Goods

Explanation: India’s major import item is Electronic goods whose share is 9.1%

Q. 41.Whose scope is wider

I. International Trade

II. International Business

III. National Trade

IV. National Business

Answer:

II.International Business

Explanation The scope of international business is very wide as it includes goods, services, and licensing, franchising and foreign investments

Q. 42.The Globalization has encouraged

I. Internal Trade

II. Local Trade

III. International Trade

IV. All

Answer:

I.International Trade

Explanation The main purpose of globalization is to increase the international trade.

Q. 43.How much foreign trade contribute in the GDP of a country

I. 15%

II. 24%

III. 20%

IV. 40%

Answer:

.II.24%

Explanation Foreign trade has a share of 24 % in GDP

Q. 44.What is India’s share of world trade?

I. 0.5%

II. 0.8%

III. 1%

IV. 5%

Answer:

II.0.8%

Explanation India’s share in the world trade is 0.8%of total product

Q. 45.Through wholly owned subsidiary over the foreign company

I. Full control

II. Partial control

III. Partnership

IV. No control

Answer:

I.Full Control

Explanation The companies with long term and substantial interest in the foreign market, when acquire full control over the foreign company by making 100% investment in its equity capital are called wholly- owned subsidiaries.

Q. 46.What is merchandise trade?

I. Exchange of goods and services through a mediator

II. Exchange of goods and services from a manufacturer

III. Exchange of goods between countries

IV. Exports and Imports

Answer:

I.Exchange of goods and services through a mediator

Explanation When the trade takes place between producer and consumer through a mediator then it is called merchandise trade

Q. 47. Visible Trade constitutes

I. Goods

II. Services

III. Raw Material

IV. Foreign exchange

Answer:

I.Goods

Explanation As goods are considered to be tangible so their trade is considered as visible trade

Q. 48.Which is the major trading partner of India?

I. USA

II. UK

III. Belgium

IV. Germany

Answer:

.I.USA

Explanation It is 13.4% of trade takes place with USA.