Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 3

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 1

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 2

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 3

101. ‘Basic balance’ in balance of payments refers to __________.
A. the balance of payments on current account.
B. the combined balance of current and capital accounts.
C. the balance in official reserves account.
D. the total of balance of current account and balances on long term items in capital account.
ANSWER: D
102. Autonomous transactions in balance of payments take place.__________.
A. only among private individuals.
B. without the approval of the government.
C. generally for profit motive.
D. as an effect of exchange rate changes.
ANSWER: C
103. For devaluation of the currency to be effective to correct balance of payments deficit.__________.
A. demand for exports should be price elastic.
B. demand for imports should be price elastic.
C. demand for imports and exports should be price elastic.
D. demand for exports should be price elastic and that for imports should be price inelastic
ANSWER: C
104. The strategy of deflation employed to correct balance of payments deficit includes use of __________.
A. monetary policy.
B. fiscal policy.
C. both fiscal and monetary policy.
D. exchange rate policy
ANSWER: C1
05. Exchange control as a method of correcting balance of payments disequilibrium which does not include________.
A. exchange restriction.
B. exchange reserves
C. exchange intervention.
D. exchange clearing arrangement
ANSWER: B
106. The size of quota allocated to a member country determines.___________.
A. its drawing power.
B. its drawing power and voting rights.
C. its drawing power, voting rights and share in allocation of SDRs.
D. its drawing power, voting rights, nomination to Board of Governors and share in the allocation of SDRs.
ANSWER: C
107. Loan facilities from IMF targeted at low-income group and available at concessional rate of interest does
not include.____________.
A. Poverty Reduction and Growth Facility.
B. Emergency Assistance.
C. Heavily Indebted Poor Countries Initiative.
D. None of the above.
ANSWER: B
108. The abbreviation SDR stands for _________.
A. Special Drawing Rights.
B. Specific Drawing Rights.
C. Special Depository Rules.
D. None of the above.
ANSWER: A
109. A value of SDR is __________.
A. equivalent to one US Dollar.
B. based on value of gold.
C. average of the value of US dollar and Euro.
D. based on basket of five currencies.
ANSWER: D
110. The term World Bank refers to________.
A. IBRD.
B. IDA.
C. Both IBRD and IDA.
D. IFC.
ANSWER: D
111. IBRD lending is not available for___________.
A. middle income countries.
B. low income countries.
C. multilateral agencies.
D. none of the above.
ANSWER: C
112. IBRD lending is available for ___________.
A. the governments to meet balance of payment problems.
B. the governments for specific programmes of delivery of social services.C. the private sector creating infrasttucture in low income countries
D. none of the above.
ANSWER: B
113. MIGA stands for _________.
A. Multilateral Investement Guarantee Agency.
B. Multilateral Institutional and Government Agencies.
C. Mutual Interest Guaranteeing Agencies.
D. none of the above.
ANSWER: A
114. Foreign exchange market is considered 24 hour market because _____________.
A. It is open all through the day.
B. All transactions are to be settled within 24 hours.
C. Due to geographical dispersal at least one market is active at any point Of time.
D. minimum 24 hours must lapse before any transaction is settled.
ANSWER: C
115. The major players in the foreign exchange market are___________.
A. Commercial banks.
B. Corporate.
C. Exchange brokers.
D. Central bank of the country and the Central Government.
ANSWER: A
116. The acronym SWIFT stands for ____________.
A. Safety Width in Financial Transactions.
B. Society for Worldwide International Financial Telecommunication.
C. Society for Worldwide Interbank Financial Telecommunication.
D. Swift Worldwide Information for Financial Transactions.
ANSWER: C
117. Which of the expansions of abbreviations is correct
A. CHIPS -Clearing House Interbank Payment System.
B. CHAPS -Clearing House American Payment System.
C. CHIPS -Chartered House International Payment Scheme.
D. CHAPS -Clearing House International Payment System.
ANSWER: A
118. Indirect rate in foreign exchange means ______________.
A. The rate quoted with the units of home currency kept fixed
B. The rate quoted with units of foreign currency kept fixed.
C. The rate quoted in terms of a third currency.
D. None of the above.
ANSWER: A
119. AVT is manageing plantations in Srilanka is an example for —
A. management contracts
B. licensing
C. franchising
D. None of these.
ANSWER: A
120. Ratios of opportunity cost different in ___________.A. Equal cost differences.
B. Absolute cost difference.
C. Comparative cost differences.
D. None of these.
ANSWER: B
121. India 1 unit of cotton = 1 unit of wheat, Pakistan 1 unit of cotton = 2 unit of wheat which is explained by
__________.
A. Absolute cost difference.
B. Comparative cost theory.
C. Modern international trade
D. None of these.
ANSWER: B
122. Modern theory of international trade explained by _________.
A. Adam smith.
B. J.S. Mill.
C. Taussing and Haberler.
D. Heckcher and ohlin.
ANSWER: D
123. Relationship between export trade and importrade is known as ________.
A. Terms of payment.
B. Terms of trade.
C. Balance of trade.
D. None of these.
ANSWER: B
124. The division of the gain from trade between the nations is explained as _________.
A. Balance of trade.
B. Terms of trade.
C. Balance of payment.
D. None of these.
ANSWER: B
125. The exchange depends on the relations between the pricing export goods and the price of import goods,
this exchange is known as __________.
A. Marshall Edgeworth terms of trade.
B. Commodity terms of trade.
C. Factoral terms of trade.
D. terms of trade.
ANSWER: B
126. When exports exceeds imports the balance of trade is _________.
A. Unfavourable.
B. Favourable.
C. Neither favourable nor unfavourable.
D. None of these.
ANSWER: B
127. When imports exceeds exports, the balance of trade is__________.
A. Unfavourable.
B. Favourable.
C. Neither favourable nor unfavourableD. None of these.
ANSWER: A
128. Trade between the nation without any restriction is known as ______.
A. Protection trade.
B. Free trade.
C. Terms of trade.
D. None of these.
ANSWER: B
129. Trade between the nation with restriction is known as ___________.
A. Free trade.
B. Terms of trade.
C. Balance of trade.
D. Protection trades.
ANSWER: D
130. ___________is duty or tax imposed on a commodity when it crosses the national boundaries.
A. Tariffs.
B. Subsidy.
C. Quotas.
D. None of these.
ANSWER: A
131. Duties that are levied on the value of goods imported or exported is called ___________.
A. Compound duties.
B. Single column tariffs.
C. Triple column tariffs.
D. Advalorem duties.
ANSWER: D
132. Duties that are levied an quantity of goods imported or exported is called __________.
A. Compound duty.
B. Specific duties.
C. Single column duties.
D. None of these.
ANSWER: B
133. Both value and quantity are taken for levy duty is called ________.
A. Compound duty.
B. Specific duty.
C. Advalorem duty.
D. Single column duty.
ANSWER: A
134. Subsidy is a payment by government to ___________.
A. Encourage the international trade.
B. Encourage the new entrepreneurs.
C. Encourage the exports.
D. Encourage the imports.
ANSWER: C
135. The quantity or value of commodity to be imported is fixed for a specific period is __________.
A. Tariff quotas.B. Global quotas.
C. Licencing system.
D. None of these.
ANSWER: B
136. The quotas that limit the quantity of free import or export at lower rates of tariff is called ___________.
A. Global quotas.
B. Licencing system.
C. Tariff quotas.
D. None of these.
ANSWER: C
137. All amount payable to or amount receivable from another country is known as ______________.
A. Balance of trade.
B. Balance of payment.
C. Terms of trade.
D. None of these.
ANSWER: B
138. Amount payable to or amount receivable from another country for visible commodities only is known as
_____________.
A. Balance of payment.
B. Balance of trade.
C. Terms of trade.
D. None of these.
ANSWER: B
139. Exchange of home currency to foreign currency is known as __________.
A. Exchange control.
B. Foreign exchange rate.
C. Foreign exchange.
D. None of these.
ANSWER: C
140. Export procedure begins with __________.
A. Indent.
B. Shipping order.
C. Consular invoice.
D. Marine insurance.
ANSWER: A
141. The bill of exchange drawn by exporter on the importer is known as ___________.
A. Documentary bill.
B. Bill of lading
C. Bill of entry.
D. Bill of sight.
ANSWER: A
142. State trading corporation of India was established _____________.
A. By a special Act of parliament.
B. Under companies Act of 1956 as Pvt Ltd Company.
C. Under companies Act of 1956 as Public Ltd. Company.
D. None of these.
ANSWER: B143. Which organization promotes export trade __________.
A. STC.
B. EXIM bank.
C. ECGC.
D. All of these.
ANSWER: D
144. Special Drawing Rights is also known as__________.
A. Gold.
B. Paper gold.
C. Paper silver.
D. None of these.
ANSWER: A
145. International chamber of commerce was established on __________.
A. 1952.
B. 1956.
C. 1944.
D. None of these.
ANSWER: D
146. Trade fair authorities of India was set up on ___________.
A. March 1970.
B. March 1978.
C. March 1977.
D. March 1979.
ANSWER: C
147. In India, Export and Import Bank was established in the year __________.
A. 1982.
B. 1984.
C. 1986.
D. 1950.
ANSWER: A
148. Internal trade is otherwise called _________.
A. Foreign Trade.
B. Home Trade.
C. Retail Trade
D. Wholesale Trade.
ANSWER: B
149. The Capital Account consists of_________.
A. Private.
B. Banking.
C. Loans.
D. All of these.
ANSWER: D
150. Godrej soaps manufactured Dettol is an example for
A. contract manufacturing
B. turnkey projects
C. management contracts
D. licensing
ANSWER: A

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Author and Assistant Professor in Finance, Ardent fan of Arsenal FC. Always believe "The only good is knowledge and the only evil is ignorance - Socrates"
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