Free International Business - I 01 Practice Test - 11th Grade - Commerce
Question 1
Customers are not homogeneous in the international market due to the different religion, caste, languages and so on.
True
False
SOLUTION
Solution : A
True. Customers across the world are from different religions and cultural backgrounds. Moreover, their tastes and preferences also vary.
Question 2
In liberalised economies, international trade is not subject to policies and regulations and can be carried out freely.
True
False
SOLUTION
Solution : B
False. International trade is always subject to various government regulations, policies, and tax regimes all over the world.
Question 3
International trade takes place because of unequal distribution of resources.
True
False
SOLUTION
Solution : A
True. There are certain things that each country can produce efficiently. A country can produce a surplus of those products or services and export them to other countries. Similarly, it can import the goods or services which it is deficient in. This pattern of expertise based on uneuqal distribution of resources provides a strong incentive for international trade.
Question 4
There is involvement of more than one currency in which of the following trade:
Domestic trade
International trade
Internal trade
None of the above
SOLUTION
Solution : B
International trade involves buying and selling of different goods and services across the world, which in turn involves purchase and sale of different international currencies.
Question 5
The cost of production in the developed economy is
SOLUTION
Solution :
Question 6
In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee:
Licensing
Contract manufacturing
Joint venture
None of these
SOLUTION
Solution : A
In licensing, the domestic manufacturer gives the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee.
Question 7
Outsourcing a part of or entire production and concentrating on marketing operations in international business is known as:
Licensing
Franchising
Contract manufacturing
Joint Venture
SOLUTION
Solution : C
Contract manufacturing refers to outsourcing a part of or entire production and concentrating on marketing operations in international business.
Question 8
When two or more firms come together to create a new business entity that is legally separate and distinct from its parents it is known as
Contract manufacturing
Franchising
Joint Ventures
Licensing
SOLUTION
Solution : C
When two or more firms come together to create a new business entity that is legally separate and distinct from its parents it is known as a joint venture.
Question 9
Which of the following is not an advantage of exporting?
Easier way to enter into international markets
Comparatively lower risks
Limited presence in foreign markets
Less investment requirements
SOLUTION
Solution : C
Limited presence in foreign markets is not an advantage of exporting.
Question 10
Which one of the following modes of entry requires higher level of risks?
Licensing
Franchising
Contract manufacturing
Joint venture
SOLUTION
Solution : D
Joint venture requires higher level of risks.