COMMERCE MCQs 01 _ Questions and answers with explanation _ Cost Accounting

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NTA UGC NET: Commerce - Unit 01: Business Environment and International Business ( Part 01)

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UNIT 01:
BUSINESS ENVIRONMENT AND INTERNATIONAL BUSINESS
(PART 01)
 
  •  Concepts and elements of business environment: Economic environment- Economic systems, Economic policies(Monetary and fiscal policies); Political environment- Role of government in business; Legal environment- Consumer Protection Act, FEMA; Socio-cultural factors and their influence on business; Corporate Social Responsibility (CSR)
  •   Scope and importance of international business; Globalization and its drivers; Modes of entry into international business 
  • Theories of international trade; Government intervention in international trade; Tariff and non-tariff barriers; India’s foreign trade policy  
  • Foreign direct investment (FDI) and Foreign portfolio investment (FPI); Types of FDI, Costs and benefits of FDI to home and host countries; Trends in FDI; India’s FDI policy 
  • Balance of payments (BOP): Importance and components of BOP 
  • Regional Economic Integration: Levels of Regional Economic Integration; Trade creation and diversion effects; Regional Trade Agreements: European Union (EU), ASEAN, SAARC, NAFTA 
  • International Economic institutions: IMF, World Bank, UNCTAD 
  • World Trade Organisation (WTO): Functions and objectives of WTO; Agriculture Agreement; GATS; TRIPS; TRIMS 
 
MCQs On Business Environment and International Business 
 

MCQ 1: Economic policy is the catalyst component of 

 
a.Economic Environment
b.Social Enviroment
c.Legal Environment
d.Political Environmet
 
Ans: Economic Environment
 
Economic environment refers to all economic surroundings that influence business 
 

Important components of economic environment are: 

  1. Economic system
  2. Economic policies
  3. Economic conditions
  4. Economic structure

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Social Environment:
- This involves understanding the society
 
- The important elements: Population, culture, moral values, standard of living, literacy and education.
 
Legal Environment: 
- This consists of laws framed by the government to regulate business operation.
 
- Example: Trade Mark Act 1999, Essential Commodity Act 1955 etc.

Political Environment:
- This includes the political parties and their policies towards business.

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MCQ 2: By which Act, the government checks restrictive trade practices ?

 
a.FEMA – 1999
b.Consumer Protection Act, 2019
c.Industrial disputes Act, 1947
d. None of the above
 
 FEMA -1999 :
* Foreign Exchange Management Act, 1999 
* Promoting the orderly development of foreign exchange in India. 
* FEMA has been introduced as a replacement of Foreign exchange Regulation Act (FERA) 1973
 
 Consumer Protection Act, 2019 
* To save the rights of the consumers by establishing authorities for settlement of consumer’s grievances.
 
Industrial disputes Act, 1947 
* To secure industrial peace and harmony by providing mechanism for investigation and settlement of industrial disputes 


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MCQ 3: Match the Following:
 


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MCQ 4: Relaxing the restrictions and controls imposed on business and industry
 
a.Liberalisation
b.Globalisation
c.Privatisation
d.0ut sourcing
 
Answer: Liberalisation 

Globalisation : Interaction and integration among people , companies, and governments world wide 
 
Privatisation: Transfer of ownership, management, and control of public sector enterprise to the private sector 
 
Out sourcing: A business practice in which services or job functions are farmed out to a third party.


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MCQ 5: Which of the following statement are correct?
 
a. ASEAN was established in Bangkok 
b. ASEAN was established on 8 August 1967 
c. ASEAN had originally 5 members 
d. All of the above
 
Answer: All of the above
 
Association of southeast Asian nations (ASEAN)
ASEAN was established in Bangkok
ASEAN was established on 8 August 1967
ASEAN had originally 5 members ( Indonesia, Malaysia, Philippines, Singapore, and Thailand )
 

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