T.Y.B.Com semester VI Business Economics Question bank for university examination 2020
1. Which of these are the limitation of Heckscher Ohlin theory
a) Over simplication
b) Partial equilibrium
c) Both (a) and (b)
d) none of these
2. In Heckscher Ohlin theory if international trade the most important source of difference inrelative community prices between nations is a difference in a factor endowment.
a) Factor Endowments
b) technology
d) demand conditions
3. Heckscher Ohlin theory of international trade is known as ______ theory of internationa trade.
a) Classical
b) Opportunity cost
c) Modern
d) None of these
4. According to Heckscher Ohlin theory, product price depends on ________ .
a) factor intensity
b) better abundance
c) Both (a) and (b)
d) None of these
5. According to Heckscher Ohlin theory, the international Trade Tech place due to difference in _______.
a) tractor supply
b) technology
c) capital formation
d) all of the above
6. Commodity terms of trade is also known as _______.
b) Net barter terms of trade
c) income terms of trade
d) utility terms of trade
7. The Ricardo's comparative cost theory is based on which of the following assumption
b) full employment equilibrium
c) free trade
d) all of these
8. Which of the following is not the assumption of Ricardo's comparative cost theory?
a) Labour is perfectly mobile within a country
b) Technology is constant
c) Labour is homogeneous
d) Two countries exchanging more than two commodities
9. Which of these are limitation of Ricardo's comparative cost theory?
a) one sided theory
b) unrealistic assumption of perfectly mobility
c) restrictive model
d) all of these
10. Factor endowment theory of international trade was developed by
a) Adam Smith
b) David Ricardo
c) Heckscher and Ohlin
d) Alfred Marshall
11. Heckscher Ohlin theory is based on which of the following assumption
a) two countries
b) two goods
c) two factors
d) all of these
12. The concept of income terms of great is given by ______.
a) Prof. Taussig
b) Prof. Viner
c) G.S. Dorrance
d) None of above
13. _______ has introduced the concept of single factoral terms of trade.
a) Prof. Viner Jacob
b) Prof. Taussig
c) G.S Dorrance
d) Prof. Ohlin
14. Prof. Viner has introduced the following concepts of terms of trade.
a) single factoral terms of trade
b) real cost terms of trade
c) utility terms of trade
d) all of above
15. _____ refer as an index of the value of exports divided by price index for imports.
a) Gross barter terms of trade
b) income terms of trade
c) Net barter terms of trade
d) utility terms of trade
16. The rate at which one country's product exchange for those of the other is referred as ____.
a) terms of trade
b) internal trade
c) international trade
d) none of the above
17. Terms of trade expresses the relationship between _____
a) export and import
b) demand and supply
c) export price and import price
d) none of these
18. Types of terms of trade include _______.
a) Net barter terms of trade
b) Gross barter terms of trade
c) income terms of trade
d) all of the above
19. _________ introduced the concept of gross barter terms of trade.
a) Adam Smith
b) Alfred Marshal
c) Taussi
d) David Ricardo
20. Reciprocal demand is expressed in terms of _______.
a) demand curve b) offer curve
c) supply curve d) all of the above
21. Commercial policy is also refer as _____.
a) trade policy
b) international trade policy
22. The objective of commercial policy is / are _______ .
a) increase trade relatio
b) protect domestic market
c) district import of goods
d) All of the above
23. Free trade policy is absence of _____.
a) tariffs
c) exchange contro
b) qoutas
d) all of the above
24. Under free trade _____ benefit more.
b) agents
c) middleman
d) none of these
25. Under free trade _____ will be higher.
a) wages b) interest
c) rent d) all of the above
26. Free trade is based on the principle of _______.
b) comparative disadvantage
c) production possibility advantage
d) None of these
27. Which of the following is not an argument for protectionism ________.
a) to protect infant industries b) to increase the level of imports
c) to protect small industries d) to improve the balance of payments
28. A tariff is a tax on ______ .
a) domestic goods and services b) foreign goods and services
c) quality of goods d) none of the above
29. Protectionism ________.
a) increase the quality of imports b) decrease the government revenue
c) increase the government earnings from tax d) all of the above
30. Which of the following is an argument for free trade ______.
a) prevents monopolies
b) unfavourable terms of trade
c) unfavourable balance of payments
d) all of the above
31. The main objective of trade barriers are ______.
a) to encourage new industries domestically | b) to reduce unnecessary imports | |
c) to conserve valuable foreign exchange | d) all of the above | |
32. | ________ is a type of tariff barriers. | |
a) Embargo | b) Ad-valorem duties | |
c) product standard | d) consular formalities | |
33. | ______ is a type of non tariff barriers | |
a) Import Quotas | b) Export Duties | |
c) Import Duties | d) Specific Duties |
34. An international trading company of the government of India ______.
b) Estate Service Corporation
c) State Trading Corporation
d) all of the above
35. Offer curve represent ______ demand.
a) horizontal b) vertical
c) reciprocal d) none of these
36. The offer curve of the country reveals its offer of _______ against its demand for imports.
a) price b) demand
c) exports d) none of these
37. _______ had put forward the technique of offer curve.
a) Marshall and Edgewort
b) J.S Mill
c) David Ricard
d) None of these
38. According to J.S Mill, equilibrium terms of trade is determined by _____ demand.
a) Market
b) Aggregate
c) Reciprocal
d) Effective
39. Gains from international trade leads to ______.
a) expansion of market
b) increase in national income
c) world welfare
d) all of these
40. Tariff barriers restrict import _______.
a) indirectly b) directly
c) none of these d) all of the above
41. _______ create a trade bloc.
a) OPEC b) NAFTA
c) ASEAN d) all of the above
42. Consular documents include ______.
a) Certificate of origin b) Import certificates
c) Certified consular invoices d) All of the above
43. Trade barriers are often called ______.
a) Free trade b) Protection
c) both (a) and (b) d) None of the above
44. Redistribution effect is called ______.
a) Revenues effect b) Consumption effect
c) Productive effect d) Transfer effect
45. Imposing of tariff, raises domestic prices causing fall in consumption of
domestic goods is_______.
a) Protective effect b) Revenue effect
c) Consumption effect d) Terms of trade effect
46. _____ is the world's largest single market area.
a) European Union
b) India
c) Pakista
d) Sri Lanka
47. At present, European union consist of ________ member countries.
a) 26 | b) 27 |
c) 28 | d) None of the above |
48. _________ occurs when a group of countries agrees to eliminate tariff between themselves.
a) Free trade area
b) preferential trade agreement
c) both a and b
d) none of these
49. When an economy union involves unifying currency it becomes _______.
a) Customs Union
b) Trade Union
c) Economic and Monetary Union
d) all of the above
50. __________ is an official institution of European Union.
a) European Council b) European Parliament
c) European commission d) European Investment Bank
51. Euro is the official currency for ________ member countries of European Union.
a) 16 | b) 17 |
c) 18 | d) 19 |
52. The __________ is the single currency of the European Union.
a) Dollar
b) Euro
c) Yen
d) Pound
53. ________ is the second largest currency in the world.
a) Dollar
b) Euro
c) Yen
d) Pound
54. The ASEAN Community include _________.
a) Political - Security Community
b) Economic Community
c) Socio - Cultural Community
d) All of the above
55. _________ became an ASEAN dialogue partner in 1995.
a) India b) Pakistan
c) Sri Lanka d) None of these
56. The referendum for Brexit was held on ______.
a) 23 June 2016 b) 23 June 2017
c) 23 August 2017 d) 23 June 2018
57. ASEAN was formed in ________ .
a) 1947 | b) 1967 |
c) 1977 | d) 1987 |
58. European Union is also known as ______.
a) European Economic Community
b) European Common Market
c) European Community
d) All of the above
60. In balance of payment account, all goods exported and imported are recorded in ______
a) Capital Account
b) Merchandise Account
c) Invisible Account
d) none of these
61. Gift and charities account are also known as ______ .
a) Exports b) Unilateral transfer
c) Import d) long term borrowings
62. In BOP, total receipt must be equal to total ________ .
a) payment b) deficit
c) income d) all of these
63. Reducing the value of domestic currency in terms of foreign currency __________.
a) Deflation
b) Exchange control
c) Tariff
d) Devaluation
64. Non-Monetary measures include ________ .
a) Tariff and Quotas
b) Import substitution
c) Export promotion
d) All of these
65. The current account in the balance of payments ________ .
a) is the total of all the visible items of trade
b) include merchandise trade and services
c) always shows a surplus
d) include autonomous and accommodating flows
66. A deficit in India's balance of payments in recent time is due to ______.
a) a steep rise in the price of crude oil
b) increase in export related imports
c) increase in imports on account of globalisation
d) All of the above
67. Good performance on ________ has helped India to improve its current account balance in recent times.
a) trade account b) invisible account
c) capital account d) all of the above
68. After covering deficits on current account, excess capital account receipts are added to______ .
a) IMF account
b) Official transfers
c) Foreign exchange reserves
d) Bank capital
69. Reducing public expenditure to correct BOP disequilibrium is a ______ measure.
a) Monetary b) Fiscal
c) Special d) None of these
70. _______ is not a cause of deficit in balance of payments.
a) increase in import
b) fall in exports
c) capital outflow
d) capital inflows
71. Under _________ the foreign investors will be given same rights as the national
investor in the matter of investment.
a) TRIPs b) TRIMs
c) GATs d) None of these
72. GATs deals with trade in _______ .
a) Services b) Patent
73. TRIMs deals with ________ .
a) Foreign Investment b) Foreign Aid
74. Under WTO TRIPs cover _________ .
a) Patent b) Copyright
c) Trademarks d) All of the above
75. _______ agreement deals in trade in services.
a) TRIMs b) TRIPs
c) GATs d) All of the above
76. Devaluation of a currency is brought about by the ________ .
b) Asian Development Bank
c) International Finance Corporation
d) Government
77. When total exports are more than total imports then current account of balance of payment is in _______ .
a) Deficit b) Balance
c) Surplus d) Both deficit and surplus
78. _________ disequilibrium is chronic in nature.
a) Cyclical
b) Fundamental
c) Structural
d) Monetary
79. Expenditure switching policy is also known as _______ .
a) Devaluation
b) Revaluation
c) Both a and b
d) None of these
80. _______ term long run disequilibrium as fundamental disequilibrium.
a) IMF b) UN
c) WTO d) None of these
81. WTO replaced GATT and came into existence on _______ .
b) 1January 1995
c) 1 January 1991
d) 1 January 1996
82. TRIPs stand for _______.
a) Trade related investment property right
b) Trade related investment public rights
c) Trade related intellectual property rights
d) Trade Related investment in services
83. The WTO agreement cover _____.
a) TRIPs b) TRIMs
c) GATs d) All of the above
84. WTO promote _____ trade.
a) bilateral
b) multilateral
c) both a and b
d) none of these
85. The only international organization dealing with the global rules of trade between nations.
a) WTO b) UN
c) IMF d) None of these
86. _____ is the current exchange rate between two countries.
a) Spot exchange rate
b) Forward exchange rate
c) Arbitrage
d) Speculation
87. ____ is the exchange rate quoted for future delivery of currencies exchange.
a) Spot exchange rate
b) Forward exchange rate
c) Arbitrage
d) None of these
88. The dealer in foreign exchange market ________ .
a) Commercial banks
b) Central Banks
c) Bill brokers
d) All of these
89. The act of buying a currency in one market and selling it in another to make profit is
_________ .
a) Arbitrage b) Speculation
90. The functions of foreign exchange market include ________.
a) provision of facilities for transfer of funds
b) provision of short term finance for trade
c) provision of facilities for trading
d) All of the above
91. ________ is not a function of foreign exchange market.
a) Transfer
b) Hedging
c) Credit
d) Investment
92. Hedgers enters the forward exchange market to _______ .
a) earn more profit b) cover the risk
c) speculate d) all of the above
93. Hedging operations helps _____ to cover the risks.
a) exporters b) importers
c) speculators d) All of the above
94. The _____ is the rate at which the currency of two nations are exchanged for each other.
a) Spot rate
b) forward rate
c) fixed rate
d) exchange rate
95. The relationship between supply of foreign exchange and rate of exchange is ________.
a) Direct b) Inverse
c) Negative d) None of these
96. The supply of foreign exchange depends on the country's ________.
a) export of goods to foreign countries
b) export of services to foreign countries
c) Investment of foreign countries in host country
d) All of the above
97. Demand for foreign currency is influenced primarily by __________.
a) size of export
b) size of import
c) both a and b
d) none of these
98. Supply of foreign currency is influenced by ________.
a) size of export
b) size of import
c) both a and b
d) none of these
99. Equilibrium rate of exchange depends on __________ .
a) Demand factors
b) Supply factors
c) both a and b
d) None of these
100. Foreign exchange in a country is demanded for ____________.
a) Import of goods
b) export of services
c) export of goods
d) import of capital
101. The purchasing power parity theory was introduced by ___________.
a) Alfred Marshal
b) Milton Friedman
c) Gustav Casse
d) None of the above
102. The short coming of PPP theory _____
a) ignores real determinants
b) neglect capital transaction in international relations
c) fails to explain large volatility
d) all of these
103. The PPP theory assumes ________ group of commodities in both countries.
a) similar
b) different
c) export
d) import
104. The limitation of purchasing power parity theory includes _________
a) selection of index number
b) applicable to static economy
c) applicable in long run
d) All of these
105. With the breakdown of the gold standard, the _______ lost significance in
the exchange market.
a) Balance of payment theor
b) Mint parity theor
c) purchasing power parity theory
d) None of these
106. The Foreign Exchange Regulation Act came into force _________
a) January 1, 2000
b) January 1, 1974
c) January 1, 1976
d) January 1, 1999
107. _______ was introduced as a transitional measure and entailed a dual exchange rate system.
a) FERA b) FEMA
c) LERMS d) None of these
108. FERA was replaced by _______ in India.
a) FEMA
c) NEER
109. The RBI introduced _______ on 1 March,1993.
a) LERMS
b) FERA
c) FEMA
d) Modified Liberalized Exchange Rate Management System
110. The main objectives of RBI's intervention in the India foreign exchange
market is to__________.
a) reduce inequalities b) maintain stability
c) both a and b d) none of these
111. India adopt ________ exchange rate system.
a) Fixed b) Flexible
c) Managed d) none of these
112. The _________ has been authorized to issue licences to those who are involved in
foreign exchange transaction.
a) RBI b) Government
c) Private companies d) All of these
113. The main objectives of RBI's intervention in the Indian foreign exchange market is_________.
a) to ensure safety of the country
b) to promote trade
c) to reduce income inequalities
d) to maintain exchange rate stability
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