1. Political friendship results in the growth of bilateral or multilateral trade. a. TRUE. 2.

Human dignity and respect is religious or spiritual but globally acceptable. a. FALSE. Human dignity and respect is not religious or spiritual, but globally acceptable. This is the learning of western civilization. They found that the dignity and respect for the individual at some point, brings about creativity but erodes teamwork. 3. Training and development assumes greater significance in global companies. a. TRUE. 4. The driving factor for FDI has been the sustained improvement in domestic economic fundamentals. a. TRUE. 5. The balance of trade is a narrow term. a. TRUE. Balance of Trade is a narrow term. It takes into account only the transactions arising out of the export and import of visible items. 6. Political friendship results in the growth of bilateral or multilateral trade TRUE 7. Human dignity and respect is religious or spiritual but globally acceptable. 8. Training and development assumes greater significance in global companies. 9. The driving factor for FDI has been the sustained improvement in domestic economic fundamentals. 10. The balance of trade is a narrow term. 11. International business is directly influenced by Economic Environment of various countries. Ans. FALSE 12. The sources and direction of FDI remained unchanged during the period 1991 to 2000. Ans. TRUE 13. Regional integration does not involve arrangements for Preferential Trade. Ans. FALSE 14. International organizations which are unsuccessful are all unethical. Ans. FALSE 15. Euro is common currency of England.Ans. TRUE

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16. Euro coins and notes began circulating in January, 2002 and local currencies were no longer accepted as legal tender ANS) TRUE - This is because, Euro currency had become a mutual currency amongst many European nations and also it was a well accepted currency all around Europe. 17. Commercial laws are same in different companies ANS) FALSE - This is because the rules and regulations of various countries are different. Various factors such as culture, free trade area and common market are different for different countries. 18. Balance of trade is a wider term than balance of payments ANS) FALSE - Balance of trade takes into account only those transactions that arise out of export and import of visible items. It takes into account only merchandise exports and imports. Whereas, balance of payments refers to economic and financial transactions. It takes into account both export and import of visible and invisible items. 19. Preferential trading agreement is a permanent removal of tariff on goods ANS) FALSE - The preferential treatment may be in the form of reduced tariff or special quota for the goods of the countries. 20. The Enron Case is failure due to corruption and politics ANS) TRUE - Then Enron case is a combination of corruption and politics. Politics leads to corruption. Hence, more and more people enter into politics. Even businessmen have started taking part in politics. Thus, politics risk cannot be completely eliminated. 21. Special Economic Zones are classified as foreign territories Ans. TRUE; SEZ is a designated duty free area to be treated as a foreign (and not Indian) territory for trade operations and all duties and tariffs. 22. Balance of trade is a wider term whereas Balance of payments is a broad term. Ans. FALSE; Balance of Trade is a narrow term and takes into account only visible trade i.e. merchandise exports and imports. It does not take into account invisibles such as services exports/imports, interest/dividend payments/receipts or remittances. It is a subset of Balance of Payments which is a much wider term and is a comprehensive account of all economic and financial transactions of a country with the rest of the world. 23. Our country has achieved full convertibility on capital account transactions Ans. FALSE; the Indian rupee is only fully convertible on the current account transactions. such as payments for foreign trade, normal short term banking and credit, payment of interest on loans and moderate remittances for education, Medicare and travel. Full Capital Account convertibility , where capital transactions-free flow of long term and short term capital- were also made free was

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considered by the Government, but later discarded due to the various Asian and emerging markets currency crises around the world. 24. MMTC is a canalized agency in India Ans. TRUE. Canalized items are items which can be exported/imported only through specific canalizing agencies such as STC (State Trading Corporation) and MMTC (Minerals and Metals Trading Corporation). Such items include petroleum products, mica, mineral oil, waste and scrap etc. 25. ECGC provides cover to exporters for exchange rate fluctuations Ans. TRUE; ECGC covers exchange rate fluctuation risk for exporters within the 2 to 3.5% of reference range. Any gains however have to be returned to ECGC. 26. Red clause letter of credit provides pre-shipment finance to beneficiary. Ans. TRUE; The bank which opens the LC for the exporter authorizes the negotiating bank to provide pre-shipment finance to the exporter to enable him to purchase raw materials. 27. Euro is a common currency of Asian countries. Ans. FALSE; Euro is the common currency of the member states of the European Union who are eligible and have opted for the common currency. Britain, Denmark and Sweden have opted out of the Common currency. 28. Competition in domestic markets is one of the factors for globalization of business. Ans. TRUE; Weaker companies who are not able to compete effectively with strong domestic competition and when the demand for the product is the domestic economy is somewhat saturated then seek to enter foreign markets to try and sell their product e.g. Japanese suto companies entering the US and European markets. 29. Dumping means selling of goods in another country below the cost of production for entering/denting into that market. Ans. FALSE; Dumping means selling good in the foreign market at a price below the domestic price i.e. sale of goods abroad at a price lower than the selling price of the same goods at the same time in the domestic market, taking into account difference in transport cost. 30. ICC has brought the world trading community on a common platform. Ans. FALSE; The World Trade organization(WTO), comprising 120 member countries and operational since 1995 has brought the world trading community on a common platform with guiding principles of objective, multilateral rule based systems and transparency, reduction of tariffs and subsidies and free market access

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