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Test: Theories of International Business - B Com MCQ


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10 Questions MCQ Test - Test: Theories of International Business

Test: Theories of International Business for B Com 2024 is part of B Com preparation. The Test: Theories of International Business questions and answers have been prepared according to the B Com exam syllabus.The Test: Theories of International Business MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Theories of International Business below.
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Test: Theories of International Business - Question 1
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What distinguishes international trade from domestic trade?

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International trade is characterized by the exchange of goods and services across national boundaries, which sets it apart from domestic trade. It often involves additional costs and complexities due to tariffs, legal systems, and distance between nations.
Test: Theories of International Business - Question 2
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What is the primary objective of trade, whether domestic or international?

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The primary goal of trade, both domestic and international, is to maximize the benefits or gains for the parties engaged in the exchange of goods and services. This involves taking advantage of differences in costs, resources, and expertise to improve overall economic welfare.
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Test: Theories of International Business - Question 3
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According to the Heckscher-Ohlin model, which factor determines a country's specialization in international trade?

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The Heckscher-Ohlin model posits that a country's specialization in international trade is determined by the abundance of factors of production within that country. It suggests that countries will export goods that make intensive use of their domestically abundant factors.
Test: Theories of International Business - Question 4
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Which model of international trade is based on the theory of comparative advantage?
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The Ricardian model of international trade is developed based on the theory of comparative advantage. It suggests that countries should specialize in producing goods in which they have a comparative advantage.
Test: Theories of International Business - Question 5
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What is the primary factor that determines the pattern of international trade according to the Gravity model?
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The Gravity model of trade proposes that the primary factors influencing the pattern of international trade are the economic sizes of nations and the distance between them. It suggests that larger economies tend to trade more with each other.
Test: Theories of International Business - Question 6
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What accounts are included in the Balance of Payments (BoP)?
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The Balance of Payments (BoP) includes the current account, which records trade in goods, trade in services, and transfer payments, and the capital account, which records international purchases and sales of assets.
Test: Theories of International Business - Question 7
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What happens when a country has a deficit in its current account?
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When a country has a deficit in its current account (spending more abroad than it receives from sales to the rest of the world), it typically finances it by running down its foreign exchange reserves or borrowing from abroad.
Test: Theories of International Business - Question 8
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What does the Balance of Trade (BoT) specifically include?
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The Balance of Trade (BoT) specifically includes the balance of trade in goods, which represents the difference between a country's exports and imports of physical goods.
Test: Theories of International Business - Question 9
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Which concept represents our inability to record all international transactions accurately in the Balance of Payments?
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Errors and Omissions is a balancing item in the Balance of Payments that reflects our inability to record all international transactions accurately.
Test: Theories of International Business - Question 10
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What does the concept of comparative advantage focus on?
Detailed Solution for Test: Theories of International Business - Question 10
Comparative advantage focuses on producing goods and services at lower opportunity costs, which leads to more efficient and beneficial international trade.
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