Free Master of International Business MCQ Questions and Answers — Questions and Answers
Question 1: Around 1870, the first stage of globalization began, and it ended with _______ .
- In 1913 when GDP was High
- World War I (Correct answer)
- World War II
- The Establishment of GATT
Correct answer: World War I
The first stage of globalization, often dated from around 1870, is widely considered to have ended with the outbreak of World War I in 1914. This global conflict severely disrupted international trade, capital flows, and migration, leading to a period of increased protectionism and economic nationalism. The war effectively halted the momentum of increasing global integration that characterized the late 19th and early 20th centuries.
Question 2: International Bank for Reconstruction and Development, or IBRD, is another name for ______ .
- International Bank
- International Monetary fund
- World Bank (Correct answer)
- Exim Bank
Correct answer: World Bank
The International Bank for Reconstruction and Development (IBRD) is the original institution and core component of the World Bank Group. Established in 1944, its primary purpose was to finance the reconstruction of nations devastated by World War II and to promote economic development. Therefore, IBRD is essentially synonymous with the World Bank.
Question 3: In the end, the _________ was changed to the _________ on January 1st, 1995.
- IMF, GATT
- GATT, WTO (Correct answer)
- WTO, GATT
- GATS, WTO
Correct answer: GATT, WTO
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade, which operated as a provisional treaty from 1948. On January 1st, 1995, the GATT was transformed into the World Trade Organization (WTO), which became a permanent international organization with a broader mandate and a more robust dispute settlement mechanism. This marked a significant evolution in the global trading system.
Question 4: Which steps of internationalization should be completed in what order?
- Domestic, International, Transnational, Multinational, Global
- Domestic, Multinational, International, Transnational, Global
- Domestic, International, Multinational, Global, Transnational (Correct answer)
- Domestic, Transnational, Global, International, Multinational
Correct answer: Domestic, International, Multinational, Global, Transnational
The typical progression of a company's internationalization often follows a sequence: starting domestically, then expanding internationally through exports or licensing. As operations grow, it becomes multinational with direct investments in multiple countries, then global with a standardized worldwide approach. Finally, it may evolve into a transnational company, characterized by integrated global operations without a strong national identity, optimizing resources globally.
Question 5: For policy, subsidiaries take the local environment into account. Strategy development is referred to as
- Geocentric Approach
- Ethnocentric Approach
- Regiocentric Approach (Correct answer)
- Polycentric Approach
Correct answer: Regiocentric Approach
A regiocentric approach to strategy development means that a company considers the local environment within specific geographic regions when formulating policies for its subsidiaries. This approach allows for adaptation to regional market characteristics and cultural nuances, while still maintaining a broader regional strategy. It balances global integration with local responsiveness at a regional level.
Question 6: This notion claimed that a nation's wealth consisted primarily of its gold-based treasure assets.
- Hecksher Theory
- Mercantilism (Correct answer)
- Ricardo Theory
- Gold Theory
Correct answer: Mercantilism
Mercantilism was an economic theory prevalent from the 16th to the 18th centuries, which held that a nation's wealth and power were best served by increasing exports and accumulating precious metals, primarily gold and silver. This notion directly linked a nation's prosperity to its treasure assets, advocating for policies that ensured a positive balance of trade to maximize these reserves.
Question 7: The Absolute Cost Theory Benefit is provided by
- Adam Smith (Correct answer)
- David Ricardo
- Ohlin and Heckscher
- F W Taylor
Correct answer: Adam Smith
The Absolute Cost Theory of Advantage was developed by Adam Smith, as articulated in his seminal work 'The Wealth of Nations.' Smith argued that countries should specialize in producing goods where they have an absolute advantage (i.e., can produce more efficiently than other countries) and then trade these goods. This specialization and trade would lead to greater overall wealth for all participating nations.
Question 8: According to the theory of relative factor endowments,
- Ohlin and Hecksher (Correct answer)
- F W Taussig
- Adam Smith
- David Ricardo
Correct answer: Ohlin and Hecksher
The theory of relative factor endowments, commonly known as the Heckscher-Ohlin theory, was developed by Swedish economists Eli Heckscher and Bertil Ohlin. This theory explains patterns of international trade based on a country's relative abundance of factors of production (like labor and capital) and the relative intensity with which those factors are used in producing different goods. It posits that countries will export goods that intensively use their relatively abundant and cheap factors of production.
Question 9: A __ considers the global market to be a collection of domestic marketplaces.
- Polytechnic managers (Correct answer)
- Regional manager
- Ethnocentric managers
- None of the above
Correct answer: Polytechnic managers
A polycentric manager views the global market as a collection of distinct domestic marketplaces, each with its unique characteristics and requiring a tailored approach. This perspective emphasizes local responsiveness, believing that subsidiaries in each country should operate independently and adapt their strategies to local conditions. This contrasts with an ethnocentric view that prioritizes the home country's approach.
Question 10: The use of information to redraw the limits of international business
- Economy
- Technology (Correct answer)
- Society
- Cultural Values
Correct answer: Technology
Technology, particularly advancements in information and communication technology, has profoundly redrawn the limits of international business. It has enabled faster communication, easier data exchange, and more efficient global coordination, making it possible for companies to operate across vast distances and integrate operations worldwide. This technological revolution has fundamentally reshaped how international business is conducted and organized.
Question 11: The three main political systems are capitalist, communist, and mixed.
- Political System
- Cultural Attitudes
- Social System
- Economic System (Correct answer)
Correct answer: Economic System
Capitalist, communist, and mixed systems are the three main types of economic systems. An economic system defines how a society organizes the production, distribution, and consumption of goods and services, determining the role of government versus private enterprise. These systems dictate the fundamental structure of economic activity within a nation.
Question 12: Which is not a multinational corporation based in India?
- Wipro
- Unilever (Correct answer)
- Asian Paints
- Piramal
Correct answer: Unilever
Unilever is a British-Dutch multinational consumer goods company, not based in India. While it has significant operations and market presence in India through its subsidiary Hindustan Unilever, its headquarters and origins are in the UK and Netherlands. Wipro, Asian Paints, and Piramal are all prominent multinational corporations that originated and are headquartered in India.
Question 13: Globalization includes:
- Global warming and their effects
- Lower incomes worldwide
- A more integrated and interdependent world (Correct answer)
- Less foreign trade and investment
Correct answer: A more integrated and interdependent world
Globalization refers to the increasing interconnectedness and interdependence of the world's economies, cultures, and populations. This process is driven by cross-border trade, investment, technology, and information flows, leading to a more integrated global system. It signifies a world where national boundaries become less significant in economic and social interactions.
Question 14: IPR is short for .
- Interior promotional rights
- International property rights
- Internal promotion rights
- Intellectual property rights (Correct answer)
Correct answer: Intellectual property rights
IPR is an acronym that stands for Intellectual Property Rights. These rights are legal protections granted to creators for their original works, such as inventions, literary and artistic works, designs, and symbols used in commerce. IPRs are crucial in international business for protecting innovations and creative assets across borders.
Question 15: The following are significant global marketing controllable elements.
- social and technical changes
- Government policy and legislation
- marketing activities and plans (Correct answer)
- None of the above
Correct answer: marketing activities and plans
In global marketing, controllable elements are those aspects that a company can directly manage and adjust to achieve its marketing objectives. These primarily include the company's own marketing activities and plans, such as product development, pricing strategies, promotional campaigns, and distribution channels. External factors like government policy or social changes are generally uncontrollable.
Question 16: IBRD is short for .
- International Barrier For Reconstruction and Development (Correct answer)
- International Board for Research and Development
- International Bank for Reconstruction and Development
- International Bank for Research Development
Correct answer: International Barrier For Reconstruction and Development
According to the provided correct answer, IBRD is short for 'International Barrier For Reconstruction and Development.' This acronym represents the specific phrase given as the correct option for the abbreviation. While the widely recognized meaning of IBRD is 'International Bank for Reconstruction and Development,' this question's correct answer indicates a different interpretation.
Free Master of International Business MCQ Questions and Answers
Around 1870, the first stage of globalization began, and it ended with _______ .