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MODEL QUESTION PAPER MB0037 International Business Management

SECTION A 1 MARK QUESTIONS

1. ______________ refers to the increasing integration of economies around the world, particularly through trade and financial flows. a. Customization b. Globalization c. Liberalization d. Privatization 2. _____________ is the set of values, beliefs, behaviours, customs and attitudes that helps the members of the organization understand what it stands for and how it does things. a. Processes b. Organizational procedures c. Principles d. Organization culture 3. GATT stands for a. General Agreement on Technology and Trade b. General Agreement on Tariffs and Trade c. General Associations of Tariffs and Trade d. Goods Accessories Tariffs and Trade

4. WTO came into existence in the year ________ a. 1975 b. 2000 c. 1985 d. 1995 5. WTOs top level decision-making body is the _______________ a. Service Council b. General Council c. Ministerial Conference d. Goods council 6. The _____________ main duties are to supply technical support for various councils and committees, to provide technical assistance for developing countries and to explain WTO affairs to the public and media. a. WTO Secretariat b. Service Council c. General Council d. Ministerial Conference

7. With

regard

to

World

Trade

Organization,

TRIPS

stands

for

____________ a. Technology Related aspects of Intellectual Property Rights b. Technical and Related aspects of International Property Rights c. Trade Related aspects of Intellectual Property Rights d. Trade Related aspects of International Payments Rights

8. The _______ is an informal forum, set up in 1999, with a mandate to discuss current international economic, financial and monetary issues that influence the international monetary and financial system. a. Group of Twenty b. International Trade Organization c. GATT d. World Trade Organization 9. The ability of a firm to exercise control over industry prices or output is known as _________________. a. Market ability b. Market power c. Price power d. Industry influence 10. The cost advantage from performing a value creation activity at the optimal location for that activity is called as ____________. a. Performance analysis b. Location economies c. Location benefits d. Location specific advantage 11. ___________ are based on the same strategic principles, same positioning and same marketing mix but there may be changes in message or other image. a. Multi national brands b. Domestic brands c. World brands d. Quality brands

12. ________________________ is a subsidiary body of the General Assembly of United Nations with the general mandate to further the progressive harmonization and unification of the Law of International Law. a. GATT b. The United Nations Commission on International Trade Law c. The Commission of Intellectual Property Law d. International Trade Organization 13. The price at which goods and services are transferred between subsidiary companies of a corporation is called _____________. a. Transfer fees b. Translation exposure c. Transfer pricing d. Transactional price 14. The practice of charging different prices for the same product in different markets is termed as ______________. a. Predatory pricing b. Price modification c. Price changes d. Price discrimination

15. A ________________ is a document issued mostly by a financial institution which usually provides an irrevocable payment undertaking to a beneficiary against complying documents as stated in the credit.

a. Bill of Lading b. Letter of Credit c. Commercial goods bill d. Commercial Invoice

16. The ________________ role is to provide a guarantee to the seller that if complaint documents are presented, the bank will pay the seller the amount due. a. Issuing bank b. Advising bank c. Confirming bank d. Paying bank

17. ____________ assures the beneficiary of the performance of the customers obligation and issued to insure the refund of advance payment. a. Bill of Lading b. Stand by letter of credit c. Irrevocable letter of credit d. Commercial invoice 18. __________________ is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. a. Mass marketing b. Market positioning c. Market targeting

d. Market segmentation 19. The most famous meeting through which led to formation of WTO was a. Uruguay round b. Qatar round c. Sweden round d. Geneva round

20. A system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand is called as _______________. a. Fixed rate bond b. Fixed exchange rate c. Floating exchange rate d. Flexible exchange rate

SECTION B 2 MARK QUESTIONS 1. Outward oriented policies promote which of the following? a. b. c. d. Increased trade and investment Advance economies Research and development Societal growth

2. Values and norms are influenced by a. Geography b. Political philosophy, religion and social structure c. Education level d. Economic level only 3. State True or False 1) Advantage accruing to the first to enter a market is called Firstmover advantage 2) Disadvantages associated with entering a foreign market before other international businesses is called First mover disadvantages a. 1-True; 2-True b. 1-False; 2-True c. 1-False; 2-False d. 1-True; 2-False

4. As trade expands in volume, in the number of products traded and in the number of countries and companies trading, there is a greater chance that disputes will arise. The ___________system helps resolve these disputes. a. WTO b. ITO c. GATT d. World Bank

5. Segmentation by benefits sought is a type of product-related segmentation: a. To determine the marketer's effectiveness in satisfying the consumer b. Used to create a psychographic profile of the benefit of having the product as a common alternative c. As a post consumption evaluation tool d. That focuses on the attributes that people seek in a product 6. State whether following two statements are True or False: 1) FOB origin means the buyer is responsible for the freight and other costs and risks 2) FOB destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyers premises a. 1-True; 2-True b. 1-False; 2-True c. 1-False; 2-False d. 1-True; 2-False 7. A country's communication, transportation, financial, and distribution systems are considered its: a. capital infrastructure b. political infrastructure c. economic infrastructure d. geopolitical network

8. Which of the following is not correct about the forward and futures contract? a. Dispersed trading in forwards vs. centralized trading of futures contracts. b. Only futures contracts can be used effectively for hedging c. Variable risks with risk forwards futures vs. standardization against of the counterparty clearinghouse. d. Customized terms and conditions of forward contracts vs. standardized futures contracts. 9. Before beginning the market segmentation process, a firm should: a. Identify bases for segmenting markets b. Forecast total market potential c. Forecast market share d. Select target market segments 10. State whether the following statements are true or false: 1) Bill of lading is a type of document that is used to acknowledge the receipt of a shipment of goods and is an essential document in transporting goods overland to the exporters international carrier. 2) As per INCOTERMS, the meaning of FOB is Free on Board. a. 1-True; 2-True b. 1-False; 2-True c. 1-False; 2-False d. 1-True; 2-False with written

11. The new trade theory restricts to the fact of a. Scale of economies b. Optimum production capacity of the firms c. Specialization on a particular line and attain sustainability d. Maintaining the cost of goods.

SECTION C 4 MARK QUESTIONS

1.

State True (T) or False (F) 1) When a discrepancy is detected by the negotiating bank, a correction to the document is not at all allowed 2) There are two types of letter of credit: commercial and standby 3) Bill of lading is an essential document for export operations 4) As per INCOTERMS, the meaning of CFR is Cost and Freight a) 1F, 2T, 3T, 4T b) 1T, 2T, 3F, 4F c) 1F, 2F, 3F, 4F d) 1T, 2T, 3T, 4T

2.

Match the following sets: 1. EXW a) It is a universally recognized set of definitions of international trade terms 2. Free on board b) In this, the delivery of goods is to the specified point at the frontier at sellers expense 3. DAF c) Delivery of goods on board at the named port of origin at sellers expense 4. INCOTERMS d) It means ex-works which means from factory

a) 1-a, 2-b, 3-c, 4-d b) 1-d, 2-c, 3-b, 4-a c) 1-b, 2-c, 3-d, 4-a d) 1-b, 2-a, 3-d, 4-c 3. Match the following sets: 1. Local products 2. International products 3. Multinational products 4. global products a) products designed to meet global segments b) products adapted to the perceived unique characteristics of national markets c) seen as having an extension potential into other markets d) seen as only suitable in one single market

a) 1-a, 2-c, 3-d, 4-b b) 1-c, 2-b, 3-a, 4-d c) 1-b, 2-d, 3-a, 4-c d) 1-d, 2-c, 3-b, 4-a 4. Select the correct option which mentions whether the following statements are True (T) or False (F) i. Changes in product design are largely dictated by whether they would improve the prospects of greater sales, and this, over the accompanying costs ii. iii. Changes in product design are subject to cultural pressures too. Most products fall in between the spectrum of standardization and adaptation a) i-F, ii-T, iii-F b) i-F, ii-F, iii-T c) i-T, ii-T, iii-T d) i-T, ii-F, iii-T

5. Which of the following are the factors encouraging standardization? 1) Economies of scale 2) Consumer mobility 3) Technology 4) Image 5) Length of existence of product

a) 2, 4 and 5 only b) 1, 2 and 3 only c) 1, 2, 3 and 4 only d) 2, 3 and 5 only

6. Which of the following are the factors encouraging adaptation? 1) Differing usage conditions 2) General market factors 3) Government policies 4) Financial consideration a) 1, 2 and 3 only b) 1, 2, 3 and 4 c) 2, 3 and 4 only d) 1 and 2 only

7. Which of the following are the motives for Foreign Direct Investment? 1) Growth motive 2) Protection of the importing countries 3) High Transportation costs 4) Exchange rate fluctuations a) 1, 2, 3 and 4 b) 2, 3 and 4 only

c) 1 and 2 only d) 1 only

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