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Dr.G.R.Damodaran College of Science

(Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Reaccredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified
CRISL rated 'A' (TN) for MBA and MIB Programmes
I MIB[2013-2015]
Semester I
Core: Global Business Environment- 153 A
Multiple Choice Questions.
1. Branches of international business do not include
A. International trade.
B. Foreign direct investment.
C. Foreign portfolio investment.
D. Multinational business.
ANSWER: C
2. Business across several countries with some decentralization of management decision making to
subsidiaries is
A. Global business.
B. Multinational business.
C. Transnational business.
D. Multi-regional business.
ANSWER: B
3. Land as a factor of production is immobile
A. Within the region.
B. Between the countries.
C. Within the nation.
D. In all cases.
ANSWER: D
4. Immobility of labour among nations is
A. Absolute.
B. Relatively of a higher degree than among regions in the same country.
C. Relatively easier than movement within the country.
D. Of the same degree as within the country.
ANSWER: B
5. Uneven distribution of natural resources
A. is the only cause for international business.
B. is the major factor for international business.
C. is among the major factors for international business.
D. is not a cause for international business.
ANSWER: C
6. The following factor does not differentiate international business from domestic business
A. different currencies.
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B. product quality.
C. product mobility.
D. trade policies.
ANSWER: B
7. Free international trade maximizes world output through
A. Countries specializing in production of goods they are best suited for.
B. Reduction in taxes.
C. Increased factor income.
D. Encouraging competition.
ANSWER: A
8. International business does not result in the following
A. Innovation is encouraged.
B. International cooperation is encouraged.
C. Imports are rendered cheap.
D. Consumption is minimized.
ANSWER: D
9. By entering into international business, a firm expects improvement in
A. Marketing.
B. All spheres of marketing, operation and finance simultaneously.
C. Any or all spheres of marketing, operation and finance.
D. Finance only.
ANSWER: C
10. By having business in different countries, a firm reduces
A. credit risk.
B. political risk.
C. financial risk.
D. business risk.
ANSWER: B
11. Wholly owned subsidiary can be set up
A. as a Greenfield venture.
B. to acquire an existing firm.
C. to have products marketed overseas.
D. to have management is overseas.
ANSWER: A
12. The essential feature of FDI is
A. Investment of a very high value.
B. Investment in shares.
C. Investors influence on the management of the enterprise.
D. Investment of low value.
ANSWER: C
13. No new investment in the host country is created in the case of
A. Greenfield FDI.
B. Acquisition.
C. Horizontal FDI.

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D. Vertical FDI.
ANSWER: B
14. A firm investing in a foreign country to distribute the products there in creation of
A. Asset seeking FDI.
B. Backward vertical FDI.
C. Forward vertical FDI.
D. Distribution FDI.
ANSWER: C
15. The disadvantages of Greenfield FDI as compared to acquisition is
A. Profit will be less.
B. Size of investment will be high.
C. Lesser control in management.
D. Delay in establishment.
ANSWER: D
16. Conglomerate FDI refers to
A. FDI made by a group of firms.
B. FDI made in subsidiaries.
C. FDI made in similar products.
D. FDI made in unrelated products.
ANSWER: D
17. Countries/ regions with huge market siz will attract
A. Market seeking FDI.
B. Efficiency seeking FDI.
C. Vertical FDI.
D. Created assets seeking FDI.
ANSWER: A
18. The following statement with respect to culture is false
A. Culture is enduring.
B. Culture is changing.
C. Culture is evolved among the members of a society.
D. Culture is determined by national boundaries.
ANSWER: D
19. The following is not a component of culture
A. Attitudes.
B. Beliefs.
C. Education.
D. Life expectancy.
ANSWER: D
20. Non- verbal communication
A. includes written communication.
B. has no place in international business.
C. includes body language.
D. should be learnt by business managers to communicate with foreigners.
ANSWER: C

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21. Religion of a person affects his/her

A. attitude towards entrepreneurship.
B. gifting practices.
C. use of products.
D. all of the above.
ANSWER: D
22. For the society, religion has no influence on
A. holidays.
B. language.
C. role of women.
D. marketing practices.
ANSWER: B
23. The role of women is restricted in
A. Eastern countries.
B. Middle East countries.
C. Traditional Islamic countries.
D. India.
ANSWER: C
24. The following nationals would be aggressive at the beginning of business negotiations, but offer
large concessions in the end
A. American.
B. Russian.
C. German.
D. Japanese.
ANSWER: B
25. Social stratification is done on the basis of
A. Income level.
B. caste.
C. education.
D. any of the above.
ANSWER: D
26. Social mobility is measured by
A. The extent to which an individual can move the strata to which he/she belongs.
B. The promptness with which an individual accepts foreign assignments.
C. The extent to which inter- caste marriage is encouraged by the society.
D. The extent to which the society as a whole shifts its habitat.
ANSWER: A
27. Lower power distance countries are characterized by
A. relationships based on equality and informality.
B. authority being accepted without question.
C. managers being paternalistic.
D. tall organizations structure.
ANSWER: A

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28. A country with high uncertainty avoidance will witness

A. lower level of stress among people.
B. decision taken as a result of group consensus.
C. less dependence on rules and regulations.
D. people are serene.
ANSWER: B
29. As per cultural dimensions of Hofstede, masculinity refers to
A. Male- female ratio in the country.
B. Society dominated by male members.
C. Society characterized by aggressive and materialistic behaviour.
D. War- ridden societies.
ANSWER: C
30. According to economic growth model of Rostow, passage of a country through the stages is
A. in the order specified.
B. in any order.
C. in the order specified, but certain stages may be skipped.
D. automatic.
ANSWER: A
31. A country in the stage of traditional society is characterized by
A. existence of traditional rule.
B. non existence of industries.
C. predominance of agriculture.
D. complete absence of literacy.
ANSWER: C
32. The stage indicating highest level of economic growth is
A. age of mass consumption.
B. age of mass production.
C. maturity.
D. drive to maturity.
ANSWER: A
33. The income level of residents in a country is indicated by
A. gross national income.
B. gross domestic product.
C. per capita gross national income.
D. per capita gross domestic product.
ANSWER: C
34. For a country with relatively lower level of cost of living PPP per capita GNI will be
A. lower than per capita GNI.
B. higher than per capita GNI.
C. same as per capita GNI.
D. may be lower or higher than per capita GNI.
ANSWER: B
35. In a business cycle, the phase preceding prosperity is
A. recession.

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B. depression.
C. recovery.
D. recession or depression.
ANSWER: C
36. Monetary policy relates to controlling
A. money supply.
B. money supply and interest rate.
C. money supply, interest rate and exchange rate.
D. credit creation by banks.
ANSWER: C
37. Analysing the business environment best assists in
A. Identifying key competitive forces; identifying competitive position; identifying key
opportunities, threats, strengths and weaknesses.
B. Auditing macro environmental influences; identifying key competitive forces; identifying
competitive position; identifying key opportunities and threats.
C. Auditing external and organisational factors; identifying key competitive forces; identifying
competitive position; identifying key opportunities and threats.
D. Assessing historical trends; auditing environmental dangers; identifying strategic capabilities;
identifying competitive position.
ANSWER: B
38. In relation to the PESTEL framework, which of the following statements is correct?
A. It assists in the assessment of organisational strengths and weaknesses.
B. It allows a detailed analysis of the structure of an industry.
C. It can be used as a checklist to understand the different environmental influences in the macro
environment.
D. Takes an historical perspective on the main political, economic, sociocultural, technological,
environmental and legal factors.
ANSWER: C
39. The following factors are key drivers of globalisation
A. Government action, exchange rates, competition and sociodemographic factors.
B. Market convergence, competition, exchange rates and cost advantages.
C. Cost advantages, government action, economic cycles and competition.
D. Market, cost, competition and government policies.
ANSWER: D
40. Scenarios are used to
A. Develop a long term view of strategy.
B. Build plausible views of different possible futures and develop a long term view of strategy.
C. Identify key drivers of change.
D. Develop a view of an environment which has a high degree of uncertainty, build plausible views
of different possible futures and take a long term view of strategy.
ANSWER: D
41. Porter suggests the following reasons for one nation being more competitive than another
A. Ability to speak English; developed network of supporting industries; absence of competition; and
low labour cost.
B. Abundant natural resources; skilled labour force; temperate climate; and democracy.

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C. Factor conditions; demand conditions; related and supporting industries; and firm strategy,
industry strategy and rivalry.
D. Strong sporting ethos; emphasis on individual achievement; strong national party in power; large
home market.
ANSWER: C
42. The five forces that affect the level of competition in an industry are
A. Threat of entrants; power of buyers; power of suppliers; threat of substitutes; competitive rivalry.
B. Threat of buyers; power of entry; power of substitutes; threat of suppliers; threat of recession.
C. Threat of recession; power of buyers; power of suppliers; threat of management failure;
competitive rivalry.
D. Threat of entry; power of buyers; power of suppliers; threat of substitutes; government action.
ANSWER: A
43. Which of the following statements in relation to the Five Forces framework is correct?
A. The framework assists in developing a broad perspective on the environment within which an
organisation is operating.
B. It is not appropriate in public sector management.
C. The framework is a means of identifying the forces which affect the level of competition in an
industry or sector.
D. The framework identifies the major stakeholders of an organisation.
ANSWER: C
44. In the Five Forces framework, threat of entrants means
A. The possibility of an existing competitor capturing the entire market.
B. The possibility of an existing competitor withdrawing from the market.
C. The possibility of a new competitor entering the market.
D. The possibility of a potential competitor entering a different market.
ANSWER: C
45. Which of the following could be effective in preventing a potential competitor from entering the
market?
A. High capital costs.
B. Differentiation.
C. Retaliation.
D. Low switching costs for buyers.
ANSWER: A
46. The threat of substitutes may be high if
A. Switching costs are of concern to the customer.
B. The substitute product provides a higher perceived value or benefit.
C. The substitute product does not provide enhanced functionality, reduced cost and better quality.
D. Customers have strong existing brand loyalty.
ANSWER: B
47. Buyers can exercise high bargaining power over their suppliers if
A. The volume they buy accounts for a large percentage of their suppliers sales.
B. There are few buyers in the market.
C. They have many suppliers to choose from.
D. There is a high concentration of suppliers.
ANSWER: A

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48. Assessment of competitive rivalry does NOT include an understanding of

A. The extent to which competitors are in balance.
B. Market growth rates.
C. Fixed costs, exit barriers and operational efficiency.
D. The management structure of an organisation.
ANSWER: D
49. Strategic Groups are
A. A group of companies competing in the same industry.
B. Organisations in the same industry with similar characteristics and following similar strategies.
C. Strategic Business Units (SBUs).
D. Organisations following similar strategies.
ANSWER: B
50. Market segmentation aims to
A. Identify the similarities and differences between groups of customers or users.
B. Identify the similarities between groups of customers or users.
C. Identify the differences between organisations and their competitors.
D. Identify the needs and wants of all customers or users.
ANSWER: A
51. What are the bases of market segmentation?
A. The business environment; the attractiveness of the market; the purchase/use situation.
B. The strength of the competitors; the attractiveness of the market; the organisational structure.
C. Strategic capabilities; organisational structure; organisational culture.
D. The characteristics of the people/organisations; the purchase/use situation; users' needs and
preferences for product characteristics.
ANSWER: D
52. Strategic gaps are
A. Weaknesses in a company's resources or competences.
B. Opportunities in the business environment not being fully exploited by the competition.
C. Opportunities in the same market segment.
D. Opportunities in new market segments.
ANSWER: B
53. PEST is an acronym which stands for
A. duct, Economy, Society, Technology.
B. Political, Economic, Societal, Technological.
C. Political, Economic, Social, Technological.
D. People, Economy, Standards, Transport.
ANSWER: C
54. Which of the following is not a major reactive motif for initiating export?
A. proximity to international customers/psychological distance.
B. Competitive pressures.
C. Foreign market opportunities/market information.
D. Unsolicited foreign orders.
ANSWER: C

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55. One of the following does not represent a general market risk in the internationalization process
A. petition from other organizations in foreign markets.
B. lack of tax incentives for organizations that export.
C. language and cultural differences.
D. complexity of shipping services to overseas buyers.
ANSWER: A
56. The following represent major reactive motives for initiating export
A. ended sales of seasonal products.
B. competitive pressures.
C. overproduction/excess capacity and unsolicited foreign orders.
D. all of the above.
ANSWER: D
57. In which way do Japanese firms typically exploit foreign market opportunities?
A. using perceived-value pricing strategies.
B. by using psychological pricing strategies.
C. by using penetration pricing strategies.
D. through mass communication where their strengths in technological innovation are emphasized.
ANSWER: C
58. According to the World Bank classification which of the following is not a high income economy?
A. Qatar.
B. Romania.
C. Austria.
D. Canada.
ANSWER: B
59. Which is the largest country within the EU by size of the population?
A. Poland.
B. Germany.
C. United Kingdom.
D. France.
ANSWER: B
60. Approximately what per cent of the world income is found outside the United States of America?
A. 30 per cent.
B. 40 per cent.
C. 75 per cent.
D. 90 per cent.
ANSWER: C
61. Which of the following is not a common form of tariffs?
A. Advalorem.
B. discriminatory.
C. specific.
D. quota.
ANSWER: B
62. A quick method that can help international marketers compare relative value of currencies is to
check the price of a

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A. Coke.
B. litre of petrol.
C. Snickers bar.
D. Big Mac.
ANSWER: D
63. An increase in the general level of prices, as measured against some baseline of purchasing power is
also known as
A. inflation.
B. recession.
C. deflation.
D. depression.
ANSWER: A
64. The European Union is an example of
A. monetary union.
B. free trade area.
C. common market.
D. economic union.
ANSWER: D
65. The economic System whereby the state holds broad powers to serve the public interest, it decides
what goods and services are produced and in what quantities and demand typically exceeds supply is
A. Market socialism.
B. Market capitalism.
C. Centrally- planned socialism.
D. Centrally- planned capitalism.
ANSWER: C
66. Islamic Law is a comprehensive code based in part on
A. Roman Law and the Napoleonic Law.
B. Anglo-Saxon common law.
C. EU law.
D. the Koran.
ANSWER: D
67. The following are examples of political risk actions
A. local-content laws and exchange controls.
B. import and labour restrictions.
C. price and tax controls.
D. all of the above.
ANSWER: D
68. Which of the following options contains the correct order from the lowest to highest level of
economic integration?
A. from economic area to customs union to common market to free trade area.
B. from customs union to economic union to free trade area to common market.
C. from free trade area to customs union to common market to economic union.
D. from common market to free trade area to economic union to customs union.
ANSWER: D

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69. Among the factors that affect the balance of trade figures are
A. exchange rates, taxes, tariffs and trade measures.
B. the business cycle at home or abroad.
C. trade barriers and agreements.
D. non tariff barriers.
ANSWER: A
70. Direct democracy is characterised by
A. citizens directly participating in the government of the state.
B. periodical elections for representatives.
C. police force in the private hands.
D. policy influenced by an individual.
ANSWER: A
71. The right of a citizen to freedom of expression and option is preserved in
A. representative democracy only.
B. all democracies.
C. direct democracy only.
D. democracy as well as totalitarianism.
ANSWER: B
72. Totalitarianism does not permit
A. practice of religion.
B. state worship of land.
C. freedom of expression to citizens.
D. recognition of citizenship to residents.
ANSWER: C
73. Theocratic totalitarianism refers to rule by
A. tribals.
B. foreign missionaries.
C. the military.
D. religious leaders.
ANSWER: D
74. Sanctions and embargoes differ in the following respect
A. Sanctions are against the individuals, embargoes are against nations.
B. Sanctions are specific trade restrictions; embargoes prohibit all business deals with another
country.
C. Sanctions are general, embargoes are specific.
D. Sanctions are against a single country, embargoes are against all foreign countries.
ANSWER: B
75. Export control refers to restrictions on
A. Domestic firms from engaging in exports.
B. Items that can be exported from the country.
C. Foreign countries exporting to the country.
D. Domestic firms engaging in trade with nation.
ANSWER: B
76. Indirect regulations affecting international business does not include

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A. Export licensing.
B. Antiboycott regulations.
C. Anti trust laws.
D. Anti corruption laws.
ANSWER: A
77. Antiboycott regulations provide that
A. . Domestic companies should not boycott any export order.
B. Foreign companies should not boycott exports from the country.
C. Domestic companies should not comply with boycott regulations imposed by the importing
country.
D. Trade should be liberal as provided under WTO charter.
ANSWER: C
78. Transfer of assets of a foreign firm to a domestic firm effected by the government with payment of
compensation is
A. Expropriation.
B. Appropriation.
C. Confiscation.
D. Domestication.
ANSWER: A
79. The compensation is paid on expropriation
A. At market rate.
B. At corresponding value in the home country of the firm.
C. Lower than market value.
D. On non-repatriable basis.
ANSWER: C
80. Confiscation refers to seizure of assets of a firm by
A. The government with adequate compensation.
B. The government without compensation.
C. Its rivals.
D. The people of the country.
ANSWER: B
81. Under domestication requirement
A. Only the ownership of the firm is transferred to rivals.
B. The management of the firm is transferred to locals.
C. Both ownership and management of the firm are transferred to locals immediately.
D. Both ownership and management of the firm are transferred to locals gradually.
ANSWER: D
82. The operating risk in the host country does not include the risk of
A. Change in government policies.
B. Exchange control.
C. Price controls.
D. Sanctions.
ANSWER: D
83. The political risk faced by a firm cannot be managed by

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A. following ethical business practices.

B. partnership with local firms.
C. insurance.
D. none of the above.
ANSWER: D
84. The legal system in India is based on
A. Common law.
B. Civil law.
C. Theocratic law.
D. Hindu law.
ANSWER: D
85. Judgments are based on detailed codes, rather than precedents under
A. Common law.
B. Civil law.
C. Theocratic law.
D. English law.
ANSWER: B
86. Theocratic law refers to
A. Islamic law.
B. Military law.
C. Law based on religious precepts.
D. Tribal law.
ANSWER: C
87. The following statement relating to civil law is true
A. The role of judges to interpret the law.
B. The role of judges to apply the law.
C. It is based on established practiced.
D. It is not applicable to criminal cases.
ANSWER: B
88. In international business cheaper alternatives to litigation is/ are
A. Conciliation.
B. Arbitration.
C. Negotiations.
D. Conciliation and arbitration.
ANSWER: D
89. A contract drafted under civil law differs from that drafted under common law in the following
respect
A. It will be detailed.
B. It will be shorter and less specific.
C. It will provide less severe damages.
D. It will be in detail.
ANSWER: B
90. Ownership of intellectual property is recognized in law by granting
A. Licenses.

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B. Patents.
C. Copyrights.
D. Patent, copyright or trademark as appropriate.
ANSWER: D
91. Product liability law relate to
A. Holding the manufacturer responsible for the damages caused to the genuine user of the product.
B. Liability of the customer for illegitimate use of the product.
C. Liability of the seller for selling spurious goods.
D. Holding the manufacturer for advertising the false information.
ANSWER: A
92. Voluntary export restraint is
A. Tariff barrier.
B. Non- tariff barrier.
C. Both tariff and non- tariff barrier.
D. Not a trade barrier.
ANSWER: B
93. The objectives of import duty is/are
A. To raise income for the government.
B. To restrict imports.
C. To encourage exports.
D. To raise income and restrict imports.
ANSWER: D
94. Import tariff benefits
A. the consumers.
B. domestic producers.
C. overseas suppliers.
D. the overseas producers.
ANSWER: B
95. Non- tariff trade barriers do not include
A. administrative regulations.
B. export subsidiaries.
C. fiscal barriers.
D. quota.
ANSWER: B
96. The following is not a feature of globalisation
A. Similar strategies are adopted by a firm in all markets.
B. Only multinational firms engage in international business.
C. Convergence of ideas and culture.
D. Obliteration of national boundaries.
ANSWER: A
97. Globalisation of markets has brought about economies of
A. scale in production.
B. distribution and marketing.
C. management.

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D. all business operations.

ANSWER: D
98. Outsourcing of components is an example of globalisation of
A. Production.
B. Marketing.
C. Purchase.
D. Production and marketing.
ANSWER: A
99. The following benefit is not expected from globalisation
A. Reaping the benefits of free trade.
B. Better quality of life through choice of product.
C. Better knowledge through compulsory education.
D. Dissemination of information through new information technology.
ANSWER: C
100. Anti- globalisation has been voiced by
A. all developing countries.
B. only few developing countries.
C. supporters from both developing and developed countries.
D. only developed countries.
ANSWER: C
101. Computer programs are protected as
A. Copy rights.
B. Trademarks.
C. Patents.
D. Industrial design.
ANSWER: A
102. Geographical indications specifies
A. Place of origin of goods.
B. Special characteristics of the product associated with place of origin.
C. Place and special characters of the product.
D. Place or special characters of the product.
ANSWER: C
103. In India, the patent available for pharmaceuticals is
A. for product only.
B. for process only.
C. both for product and process
D. neither product nor process.
ANSWER: C
104. The degrading effect on the environment by MNCs is through
A. Relocating production from developing to developed countries.
B. Relocating production from developed to developing countries.
C. Flouting environmental laws.
D. Relocation of distribution.
ANSWER: B

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105. Which one of the following is true of the Chinese?

A. They pay close attention to long standing relationships.
B. 'They are very relaxed about time' and 'they prefer to work on a one-to-one basis' only.
C. They are very relaxed about time.
D. They prefer to work on a one-to-one basis.
ANSWER: B
106. In this culture, equality is a desirable value. However the actual behaviour of whom does not show
so much equality, as in this culture people should get what they deserve if they have the capabilities to
work hard?
A. Romanians.
B. Americans.
C. Russians.
D. The French.
ANSWER: B
107. Which of the following sentences about individualism is not true?
A. Individualistic are universalistic cultures while collectivistic cultures are articularistic.
B. Individualists tend to see brands as unique human personalities.
C. In individualistic cultures private time and work are not strictly separated.
D. Individualism is increasing world-wide because it is associated with wealth.
ANSWER: B
108. Confucianism has adherents mainly in
A. Eastern Europe.
B. The USA.
C. China, Korea and Japan.
D. Africa.
ANSWER: C
109. Which of the following is not true about high- context cultures?
A. lawyers are less important.
B. Negotiations are lengthy.
C. People make a big deal out of private space.
D. Competitive bidding is less important.
ANSWER: C
110. Which of the following is not an element of culture?
A. Tax law.
B. Language.
C. Traditions.
D. Art.
ANSWER: B
111. To assess the potential of international markets, organizations generally compare nations with
respect to
A. political regime.
B. demographics, GNP/capita and 'consumer preferences'.
C. consumer preferences.
D. demographics, GNP/capita.

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ANSWER: B
112. Which of the following statement is true?
A. The payment of interest is considered illegal by Islam.
B. The payment of interest is considered legal by Islam.
C. Alcohol consumption is considered legal by Islam.
D. Women entrepreneurs are encouraged.
ANSWER: A
113. The cultural environment of a country is best defined by which characteristics?
A. Degree of nationalism and economic community membership.
B. Production process and standards of measurement.
C. Standard of living and stage of economic development.
D. Values, attitudes, heroes, myths and symbols.
ANSWER: D
114. Hyperbole, persuasiveness, dreams, great expectations, and comparative advertising are reflections
of which Hoftede's dimension?
A. Individualism.
B. Femininity.
C. Masculinity.
D. Collectivism.
ANSWER: C
115. Which of the following sentences is not true?
A. In small power distance cultures, freedom means independence.
B. Characteristic of weak uncertainty avoidance is resistance to change, a desire for stability.
C. The norm, the desirable, in masculine societies is that one wants to show one's success.
D. In large power distance and collectivistic cultures, children remain dependent on their parents
much more than those in small power distance and individualistic cultures.
ANSWER: B
116. To what extent of the world population is collectivist?
A. 10- 20 per cent.
B. 40-50 per cent.
C. 70-80 per cent.
D. 90-95 per cent
ANSWER: C
117. The roots of individualism are in
A. France.
B. Saudi Arabia.
C. England.
D. The USA.
ANSWER: C
118. Income and population are two variables that can be used
A. demographic segmentation.
B. Behavioural segmentation.
C. Lifestyle segmentation.
D. Psychographic segmentation.

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ANSWER: A
119. Strong exchange rates can
A. help predict change in lifestyle across Europe.
B. predict the evolution of sales for particular brands.
C. help estimate consumer purchasing power.
D. drive imports to become cheaper.
ANSWER: D
120. When an organization selling electric and electronic household goods evaluates international
markets in view of entering them, a crucial factor taken into account is represented by
A. The demographic characteristics.
B. The economic factors.
C. The cultural factors.
D. The technological factors.
ANSWER: B
121. The least demanding targeting strategy in international marketing is
A. focused.
B. differentiated.
C. concentrated.
D. undifferentiated.
ANSWER: D
122. Which of the following are positive reasons for internationalization?
A. Market diversification.
B. Economies of scale.
C. International competitiveness.
D. All of the above.
ANSWER: D
123. Which economic factors should be analysed by organizations wishing to expand in international
markets?
A. Interest rates.
B. Employment.
C. Purchasing power.
D. All the above.
ANSWER: D
124. How can a marketer use the age distribution of the population in a market?
A. the marketer can use it to identify the purchasing power of the population in each country.
B. the marketer can use it to identify the potential number of customers in various age groups.
C. the marketer can use it to identify behavioural patterns within each age group.
D. the marketer can use it to identify lifestyle patterns within various age groups.
ANSWER: B
125. In the PEST framework for environmental analysis what does the letter E stands for
A. Ethical .
B. Ecological .
C. Educational.
D. Economic.

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ANSWER: D
126. Analyzing processes of change in the business environment involves conceptualizing it as
A. Complex.
B. Static.
C. Dynamic.
D. Diverse .
ANSWER: D
127. Profit may be defined as
A. the difference between total wage costs and total sales revenue .
B. total revenue from sales .
C. the difference between total production costs and total sales revenue .
D. the amount of money paid to shareholders as dividends .
ANSWER: C
128. The concept of a firm's 'license to operate' refers to
A. a legal requirement for company registration .
B. the need for a firm to retain its legitimacy in the eyes of the public .
C. a qualification needed by company directors .
D. an agreement recognizing trade unions .
ANSWER: B
129. What does the term 'third sector' refer to?
A. the high technology industries .
B. the service sector .
C. the voluntary sector .
D. small and medium sized enterprises (SMEs) .
ANSWER: C
130. The idea that consumers are in charge of the economic system because their preferences drive
business decisions about what to produce is referred to as
A. consumer activism.
B. consumer sovereignty.
C. consumerism .
D. consumer therapy .
ANSWER: B
131. A multi-national corporation (MNC) is defined by
A. carrying out production in more than one country.
B. having sales in more than one country.
C. having a multi-ethnic workforce .
D. having suppliers in more than one country.
ANSWER: A
132. Which type of organization structure is characterized by departments or units dealing with
specialized tasks?
A. Matrix.
B. Divisional .
C. Hierarchical .
D. Functional.

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ANSWER: D
133. The political system that stresses the primacy of collective goals over individual goals is
A. individualism.
B. Collectivism.
C. Socialism.
D. Communism.
ANSWER: B
134. The system of government in a nation is called the
A. Political system.
B. Economic environment.
C. Political environment.
D. National policy.
ANSWER: C
135. A philosophy of freedom of an individual in the economic and political pursuits is
A. Collectivism.
B. Individualism.
C. Socialism.
D. Democracy.
ANSWER: D
136. The political power monopolized by a party that governs according to religious principles is
A. Communist totalitarianism.
B. Theocratic totalitarianism.
C. Secular totalitarianism.
D. Tribal totalitarianism.
ANSWER: B
137. The productive activities privately owned as opposed to being owned by the state is
A. Market economy.
B. Secular economy.
C. Command economy.
D. Mixed economy.
ANSWER: A
138. The goods and the services produced, priced and distributed by the government is
A. Market economy.
B. Secular economy.
C. Command economy.
D. Mixed economy.
ANSWER: C
139. The law based on the tradition of a precedent and custom is
A. civil law.
B. criminal law.
C. common law.
D. religious law.
ANSWER: C

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140. The protection against the new invention of a product or process for a defined period is
A. patent.
B. trade mark.
C. copy right.
D. Technology.
ANSWER: A
141. The exclusive legal right of authors. Composers, play writes, artists and publishers to publish and
disperse their works is
A. Patent.
B. trade mark.
C. copy right.
D. Technology.
ANSWER: C
142. The Paris Convention for the Protection of Industry Property was dated
A. 1783.
B. 1883.
C. 1983.
D. 2003.
ANSWER: A
143. The transfer of the ownership of state property into the hands of the private individuals by the sale
of state assets through auction is
A. Privatization.
B. Liberalization.
C. Globalization.
D. Domestication.
ANSWER: A
144. MFN is an acronym of
A. Most Favorable Nations.
B. Most Favored Nations.
C. Most Fortune Nations.
D. Most Fastest Nations.
ANSWER: B
145. The law that prevent the practices in restraint of trade is
A. Antiboycott regulations.
B. Antitrust Laws.
C. Antibribery regulations.
D. Anticorruption regulations.
ANSWER: A
146. The taking over of a private firm by the host country government to be run it as a government unit
is
A. expropriation.
B. confiscation.
C. nationalization.
D. domestication.
ANSWER: C

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147. The requirement imposed by the host country government that gradually ownership and
management of the firm transferred to the locals is
A. expropriation.
B. confiscation.
C. nationalization.
D. domestication.
ANSWER: D
148. The creation of the difficult conditions in the country so as to force the foreign investors opt out of
the country
A. creeping expropriation.
B. boycott.
C. violence.
D. exchange control.
ANSWER: A
149. The total accumulated value of foreign- owned assets at a given period of time is
A. flow of FDI.
B. stock of FDI.
C. inflow of FDI.
D. outflow of FDI.
ANSWER: B
150. The focus on increasing profitability and profit growth by reaping the cost reduction that come
from economies of scale is
A. global standardization strategy.
B. localization strategy.
C. transnational strategy.
D. international strategy.
ANSWER: A
151. The focus on increasing profitability by customizing the firm`sgoods or services providing good
match to taste and preferences in different national markets is
A. global standardization strategy.
B. localization strategy.
C. transnational strategy.
D. international strategy.
ANSWER: B
152. The firms trying to simultaneously achieve low costs through locating economies in the firm`s
global network of operations is
A. global standardization strategy.
B. localization strategy.
C. transnational strategy.
D. international strategy.
ANSWER: C
153. The strategy of taking the products first produced for their domestic market and selling them
internationally with only minimal local customization is
A. global standardization strategy.

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B. localization strategy.
C. transnational strategy.
D. international strategy.
ANSWER: D
154. An agreement whereby a person grants the other the rights to intangible property for a specified
period for a return of royalty is
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: B
155. The agreement in which a firm not only sells intangible property to an entity but also insist on the
strict rules as to how it does business is
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: A
156. A entitlement establishing a firm that is jointly owned by two or more otherwise independent firms
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: C
157. The cooperative agreement between potential or actual competitors is
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: D
158. The entry mode that allow firms to export their process know- how to countries where FDI is
prohibited, thereby enabling the firm earn greater return from this assets is
A. licensing.
B. consultancy exports.
C. project exports.
D. turnkey projects.
ANSWER: D
159. The abstract ideas about what a group of people and that when taken together constitute a design
for living is
A. norms.
B. values.
C. Attitude.
D. belief.
ANSWER: B

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160. The social guidelines and rules that prescribe appropriate behavior in particular situation is
A. norms.
B. values.
C. Attitude.
D. belief.
ANSWER: A
161. The relation between TRIPS and WIPO conventions is
A. WIPO conventions are more valid.
B. TRIPS agreement excludes subjects covered by WIPO conventions.
C. TRIPS agreement is subordinate to WIPO conventions.
D. TRIPS agreement incorporates substantive provisions of WIPO conventions. Answer: D
ANSWER: D
162. The leading continent in international trade in IT products is
A. Asia.
B. Europe.
C. America.
D. Africa.
ANSWER: A
163. The origin of Common law is in
A. America.
B. England.
C. Russia.
D. India.
ANSWER: B
164. The law system practices in Japan is
A. Common law.
B. Code law.
C. Civil law.
D. Religious law.
ANSWER: B
165. Terrorism in the host country is a
A. ownership risk.
B. operating risk.
C. transfer risk.
D. general risk.
ANSWER: B
166. Case law is the other name for
A. code law.
B. common law.
C. civil law.
D. criminal law.
ANSWER: B
167. The new economic policy has components
A. Liberalization.

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B. Privatization.
C. Globalization.
D. LPG.
ANSWER: D
168. A mixed economy is necessarily a
A. controlled.
B. planned.
C. organized.
D. planned, organized and controlled.
ANSWER: B
169. Which law emphasized the importance of continuous development and expansion of export
oriented production?
A. Export Policy Resolution, 1970.
B. MRTP.
C. IRDA.
D. The Companies Act.
ANSWER: A
170. What is the growth rate of the industrial output in the last four decades?
A. 4.5 % per annum.
B. 5 % annum.
C. 6 % per annum.
D. 5.5 % per annum.
ANSWER: D
171. Micro environment consist of
A. suppliers.
B. competitors.
C. political.
D. cultural.
ANSWER: A
172. Macro environment consists of
A. suppliers.
B. competitors.
C. marketing.
D. distributors.
ANSWER: B
173. Competitors, Customers and Public are the part of
A. macro environment.
B. micro environment.
C. business necessities.
D. internal environment.
ANSWER: B
174. What are the important external factors that constitute the economic environment of business?
A. economic condition.
B. economic policy.

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C. economic system.
D. economic condition, policy and system.
ANSWER: D
175. What are the main objectives of the policy initiatives?
A. Reducing the govt. Deficit.
B. Reduction of the current account deficit in the balance of payments.
C. Raising GDP growth.
D. All of the above.
ANSWER: B
176. When was the first Five year Plan?
A. 1950.
B. 1951.
C. 1952.
D. 1953.
ANSWER: B
177. What are the main objectives of Five year plan?
A. achieve full employment.
B. reduce inequalities of income and wealth.
C. setup a socialist society based on equality.
D. balanced economy.
ANSWER: D
178. What do you mean by DGTD?
A. Director General of Trade and Development.
B. Director General of Total Development.
C. Director General of Technical Development.
D. Director General of Transport Development.
ANSWER: A
179. Environment is synonym with
A. task.
B. relation.
C. people.
D. situational variables.
ANSWER: D
180. The purpose of a SWOT analysis is to analyse
A. business environment in which an organisation operates.
B. The strategic capability of an organisation.
C. The business environment and the strategic capability of an organisation relative to its
competitors.
D. External and organisational environments.
ANSWER: C
181. SWOT should be
A. A general list of issues under each heading.
B. Focused on key issues and as specific as possible.
C. Completed when an analysis of the external environment has been conducted.

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D. SWOT analysis is the best strategic management framework for analysing the competitive
positioning of an organization.
ANSWER: B
182. Ethical issues concerning business and public sector organisations exist at three levels
A. Macro, Corporate, Individual.
B. Corporate, Business, Functional.
C. Corporate, Functional, Individual.
D. Business, Family, Individual.
ANSWER: A
183. An ethical stance is the extent to which
A. An organisation meets the expectations of its stakeholders.
B. An organisation will exceed its minimum obligations to stakeholders and society at large.
C. An organisation meets regulatory requirements.
D. An organisation respects the dominant religious beliefs of the country in which it operates.
ANSWER: B
184. Corporate Social Responsibilty concerns
A. how an organisation meets the expectations of its stakeholders.
B. the behaviour of individual managers.
C. external stakeholder relationships.
D. the ways in which an organisation exceeds its minimum required obligations to stakeholders.
ANSWER: D
185. The cultural frames of reference include
A. National; organisational field; competitors.
B. National; organisational; organisational field and functional/divisional.
C. Unions; organisational; industrial.
D. Organisational; colleagues; organisational field.
ANSWER: B
186. An organisational field is a
A. Definition of the competitive structure of an industry.
B. Set of assumptions held in common within an industry.
C. Set of benchmarks which organisations should achieve in order to be successful
D. Community of organisations with a common meaning system and which interact more frequently
with each other than with those outside the field.
ANSWER: D
187. The culture of an organisation can be conceived as consisting of layers
A. Values; beliefs; behaviours; and taken-for-granted assumptions.
B. . Values; beliefs; tasks, objectives.
C. Beliefs; tasks; personalities.
D. Individual; functional; organisational.
ANSWER: A
188. The cultural web is a
A. Representation of the taken-for-granted assumptions, or paradigm, of an organisation and the
physical manifestations of the organisation culture.
B. Representation of the taken-for-granted assumptions, or paradigm, of an organization and its

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competitors.
C. Representation of the power in an organisation.
D. Representation of the politics in an organisation.
ANSWER: A
189. The environmental factor that includes peoples attitude to family, religion etc is
A. Cultural.
B. Economic.
C. Socio- cultural.
D. Political.
ANSWER: C
190. The value chain attempts to identify those activities which add value to
A. The organizations stakeholders.
B. The senior strategic managers in the organization
C. The organizations shareholders.
D. The customer or final user.
ANSWER: D
191. The value chain is composed of primary & support activities. Which answer below provides the
correct components for primary activities?
A. Service, human resource management, marketing & sales, operations and outbound logistics.
B. Marketing & Sales, Operations, Outbound Logistics and Service.
C. Procurement, Firm Infrastructure, Human Resource Management, Technology Development and
Marketing & Sales.
D. Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales and Service.
ANSWER: C
192. Which types of organizational knowledge is a source of competitive advantage?
A. Explicit knowledge which is classified and formalized in a planned and systematic way.
B. Personal knowledge which is hard to communicate and formalize.
C. Customer databases, market research reports, management reports.
D. Collective and shared experience accumulated through systems, routines and activities of sharing
across the organization.
ANSWER: D
193. The global commons refers to
A. The shared parts of the earth.
B. The parts of the Earth not accessible to any one nation.
C. Natural phenomenon that affects all inhabitants of the earth.
D. All parts of nature that contribute to the health of the global environment
ANSWER: C
194. The largest oil- exporting country in the world is
A. Norway.
B. Saudi Arabia.
C. Russia.
D. Great Britain.
ANSWER: B
195. Which of the following is a possible consequence of global warming?

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A. A global temperature increase of ten to fifteen Celsius.

B. An increase in ultraviolet radiation reaching the earths surface.
C. A global temperature increase of three to ten degrees Fahrenheit.
D. An increase in the chlorofluorocarbons in the atmosphere.
ANSWER: D
196. The process whereby a commons is spilt into privately held pieces of property in order to manage
resources responsibility is
A. Land division.
B. Land reform.
C. Enclosure.
D. Privatisation.
ANSWER: D
197. What 1997 treaty adopted a complex formula for greenhouse emissions to 1990 levels in the
global north? Kyoto protocol.
A. UNEP . framework
B. convention on climate change.
C. UNCLOS III
D. Montreal Protocol.
ANSWER: B
198. Which countries has been reluctant to agree to reduction in Greenhouse gas emission?
A. Russia.
B. Great Britain.
C. France.
D. China
ANSWER: B
199. Air and water pollution are typically
A. Regional.
B. Multilateral.
C. Economic.
D. Global.
ANSWER: D
200. Which of the following is characteristic of the final stage of demographic transition?
A. High death rates.
B. Rapid population growth.
C. Birth and death rates that are close to each other.
D. High birth rates.
ANSWER: C
201. The Montreal Protocol on CFCs
A. is one of the most prominent failures of international efforts to coordinate environmental
protection.
B. has been successful, but is not projected to have any significant effect on the hole in the ozone
layer.
C. has been the most important success in global efforts to coordinate environmental protection.
D. has been ratified by most states and seen some voluntary compliance, but has failed to win the
approval of some of the largest violators of CFC emissions.

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ANSWER: D
202. The rate of increase in the air pollution is
A. 4 per cent.
B. 5 per cent.
C. 6 per cent.
D. 7 per cent.
ANSWER: A
203. The Clean Water Act was passed in the year
A. 1960.
B. 1970.
C. 1980.
D. 1990.
ANSWER: B
204. The trend seen in the economic systems of the countries is that
A. command economies are moving towards mixed economies.
B. mixed economies are moving towards command economies.
C. mixed economies are moving towards market economies.
D. market economies are moving towards command economies.
ANSWER: C
205. A country in the stage of traditional society is
A. characterized by existence of traditional rule.
B. non- existence of industries.
C. predominance of agriculture.
D. complete absence of literacy.
ANSWER: C
206. The economic growth rate of a nation is not affected by
A. business cycle.
B. sporadic events
C. government policies.
D. none of the above.
ANSWER: D
207. The essential feature of FDI is
A. Investment in shares.
B. investment of a very high value.
C. Investor staying apart from management.
D. Investors influence on the management of the enterprise.
ANSWER: D
208. Society has change their expectation from "trust me" attitude regarding business to a
A. listen to me attitude
B. Help me attitude .
C. Accept it attitude .
D. Prove it attitude
ANSWER: D

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209. . Interactions between business and society occur

A. within a finite natural ecosystem
B. only during an environmental crisis.
C. when employees and community are of similar cultural backgrounds.
D. when legislation is passed requiring interaction
ANSWER: C
210. A successful business must meet its
A. economic objectives .
B. social objectives.
C. economics and social objectives.
D. top executives expectations.
ANSWER: C
211. Low power distance countries are characterized by
A. relation based on equality and informality.
B. authority being accepted without question.
C. managers being paternalistic.
D. tall organization structure.
ANSWER: A
212. The third phase in the public issue life cycle begin when
A. a corporate crisis occurs
B. an issue begins to capture public attention .
C. laws are passed .
D. legislative proposal or draft regulation emerge.
ANSWER: A
213. Society can utilize corporate public affairs units to
A. perceive, monitor and understand external changes.
B. influence corporate policy and practice
C. Both A & B .
D. None of the above .
ANSWER: A
214. Customer environmental intelligence includes
A. demographic factors.
B. an analysis of the firms competitors .
C. new technological application .
D. the cost of producing consumer goods.
ANSWER: C
215. GSP stands for
A. Goods Shipment Procedure.
B. General System of Payments.
C. Generalized System of Preferences.
D. Generalized Scheme of Payments.
ANSWER: C
216. An effective crisis management plan will
A. minimize the seriousness of the problem.

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B. exaggerate minor incident .

C. public affairs use the internet to convey the message .
D. immediately apologize to the public and accept any liability.
ANSWER: A
217. Economic growth can be measured by
A. the CPI .
B. the CBI .
C. GDP.
D. MPC.
ANSWER: C
218. In a boom
A. unemployment is likely to fall .
B. prices are likely to fall .
C. demand is likely to fall.
D. imports are likely to grow.
ANSWER: A
219. In a recession, GDP
A. grows negatively .
B. grows slowly .
C. grows by 0%.
D. grows rapidly.
ANSWER: A
220. If labour productivity per week is 200 units and there are 5 employees what is the total output?
A. 40 units.
B. 195 units.
C. 1000 units .
D. 200 units.
ANSWER: C
221. Labour productivity measures
A. the output per worker .
B. the output per machine .
C. total output .
D. marginal output.
ANSWER: A
222. Potential growth measures
A. the growth of the fastest economy in the world.
B. the fastest growth an economy has ever achieved.
C. the present rate of growth of an economy.
D. the rate of growth that could be achieved if resources were fully employed.
ANSWER: D
223. Economic growth can be seen by an outward shift of
A. the production possibility frontier.
B. the gross domestic barrier.
C. the marginal consumption frontier.

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D. the Minimum Efficient Scale .

ANSWER: A
224. The socially optimal rate of growth is
A. zero.
B. Negative.
C. where the marginal social benefit = the marginal social cost.
D. total social costs are minimised .
ANSWER: C
225. To anticipate what the economy is going to do next the government will look at
A. lagging indicators.
B. flashing indicators.
C. coincidental indicators .
D. leading indicators
ANSWER: D
226. When an economy first begins to grow more slowly
A. GDP increases.
B. Inflation is likely to increase .
C. stock levels are likely to increase.
D. investment in equipment is likely to increase.
ANSWER: C
227. Demand pull inflation may be caused by
A. an increase in costs.
B. a reduction in interest rate .
C. a reduction in government spending .
D. an outward shift in aggregate supply .
ANSWER: B
228. Inflation
A. reduces the cost of living .
B. reduces the standard of living .
C. reduces the price of products .
D. reduces the purchasing power of a pound .
ANSWER: D
229. An increase in injections into the economy may lead to
A. an outward shift of aggregate demand and demand pull inflation .
B. an outward shift of aggregate demand and cost push inflation .
C. an outward shift of aggregate supply and demand pull inflation.
D. an outward shift of aggregate supply and cost push inflation.
ANSWER: A
230. An increase in aggregate demand is more likely to lead to demand pull inflation if
A. aggregate supply is perfectly elastic .
B. aggregate supply is perfectly inelastic .
C. aggregate supply is unit elastic .
D. aggregate supply is relatively elastic.
ANSWER: B

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231. An increase in costs will

A. shift aggregate demand .
B. shift aggregate supply .
C. reduce the natural rate of unemployment .
D. increase the productivity of employees .
ANSWER: B
232. The effects of inflation on the price competitiveness of a countrys products may be offset by
A. an appreciation of the currency .
B. a revaluation of the currency .
C. a depreciation of the currency.
D. lower inflation abroad .
ANSWER: C
233. Menu costs in relation to inflation refer to
A. costs of finding better rates of return .
B. costs of altering price lists .
C. costs of money increasing its value .
D. costs of revaluing the currency .
ANSWER: C
234. In the short run unemployment may fall below the natural rate of unemployment if
A. nominal wages have risen less than inflation .
B. nominal wages have risen at the same rate as inflation .
C. nominal wages have risen more than inflation .
D. nominal wages have risen less than unemployment .
ANSWER: A
235. According to the Phillips curve unemployment will return to the natural rate when.
A. nominal wages are equal to expected wages .
B. real wages are back at equilibrium level .
C. nominal wages are growing faster than inflation .
D. inflation is higher than the growth of nominal wages .
ANSWER: B
236. The Phillips curve shows the relationship between inflation and what?
A. The balance of trade .
B. The rate of growth in an economy .
C. The rate of price increases .
D. Unemployment.
ANSWER: D
237. An increase in investment is most likely to be caused by
A. lower interest rates . .
B. lower national income
C. a decrease in the marginal propensity to consume .
D. an increase in withdrawals .
ANSWER: A
238. An outward shift in the Marginal Efficiency of Capital should

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A. decrease consumption .
B. increase aggregate demand .
C. reduce aggregate supply .
D. slow economic growth .
ANSWER: B
239. An increase in interest rates
A. is likely to reduce savings .
B. is likely to reduce the external value of the currency .
C. leads to a shift in the mec schedule .
D. leads to a movement along the MEC schedule
ANSWER: D
240. The accelerator assumes
A. the marginal propensity to consume is constant .
B. the economy is at full employment .
C. there is a constant relationship between net investment and the rate of change of output . .
D. the multiplier is constant
ANSWER: C
241. Investment depends mainly on
A. past levels of income .
B. future expected profits.
C. present national income levels .
D. historic data .
ANSWER: B
242. A profit maximising firm will invest up to the level of investment where
A. the cost of borrowing equals the marginal efficiency of capital .
B. the cost of borrowing is greater than the marginal efficiency of capital.
C. the cost of borrowing is less than the marginal efficiency of capital.
D. the cost of borrowing equals the marginal propensity to consume.
ANSWER: A
243. Investment is
A. an injection that increases aggregate demand.
B. a withdrawal that increases aggregate demand.
C. an injection that decreases aggregate demand.
D. a withdrawal that decreases aggregate demand.
ANSWER: A
244. Investment is an unstable element of aggregate demand because it depends heavily on
A. government policy.
B. Expectations.
C. national income.
D. historic trends.
ANSWER: B
245. If an increase in investment leads to a bigger increase in national income this is called the
A. accelerator.
B. aggregate demand.

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C. monetarism.
D. multiplier.
ANSWER: B
246. The difference between gross investment and net investment is
A. depreciation.
B. acceleration.
C. deceleration.
D. capital investment.
ANSWER: A
247. Which of the following is not an argument for protectionism?
A. To protect infant industries.
B. To increase the level of imports.
C. To protect strategic industries.
D. To improve the balance of payments
ANSWER: B
248. Tariffs
A. decrease the domestic price of a product.
B. increase government earnings from tax.
C. increase the quantity of imports.
D. decrease domestic production.
ANSWER: B
249. Free trade is based on the principle of
A. comparative advantage. .
B. comparative scale.
C. economies of advantage.
D. production possibility advantage
ANSWER: A
250. If a country can produce 10 of product A or 4 of product B the opportunity cost of 1B is
A. 0.4A.
B. 2.5A.
C. 10A.
D. 1B.
ANSWER: B

Staff Name
BRINDHA.T.C.

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