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.