HPSC ASSISTNAT PROFESSOR COMMERCE BOOK

17 March 2025 by

VIVEK

1. What is the primary objective of international business? (hpsc assistant professor commerce book and test series)

a) To create a global monopoly

b) To increase domestic competition

c) To earn profits by exploiting foreign markets

d) To improve local employment only

Answer: c) To earn profits by exploiting foreign markets

Explanation: The primary objective of international business is to expand into foreign markets to earn profits and increase business opportunities through global trade.

2. Which of the following is a key driver of globalization? (hpsc assistant professor commerce book and test series)

a) Political instability

b) Advances in technology

c) Trade restrictions

d) Decline in international trade

Answer: b) Advances in technology

Explanation: Technology, particularly in communication and transportation, plays a critical role in driving globalization by reducing barriers to international trade and facilitating global connectivity.

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3. Which of the following is NOT a mode of entry into international business? (hpsc assistant professor commerce book and test series)

a) Exporting

b) Licensing

c) Joint Ventures

d) Domestic manufacturing

Answer: d) Domestic manufacturing

Explanation: Domestic manufacturing refers to production within a home country, not an entry mode into international business. Exporting, licensing, and joint ventures are common international entry modes.

4. Which factor is least important in driving globalization? (hpsc assistant professor commerce book and test series)

a) Global communication systems

b) International trade agreements

c) Cultural diversity

d) Transportation innovations

Answer: c) Cultural diversity

Explanation: While cultural diversity can influence international business, factors like communication systems, trade agreements, and transportation innovations have a more significant role in driving globalization.

5. In the context of international business, what does "outsourcing" refer to? (hpsc assistant professor commerce book and test series)

a) Sourcing raw materials from a different country

b) Sending production to a lower-cost country

c) Expanding a business into new foreign markets

d) Acquiring foreign companies to enter new markets

Answer: b) Sending production to a lower-cost country

Explanation: Outsourcing is the practice of transferring part of the production process to a foreign country where labor or manufacturing costs are lower, typically to reduce expenses.

6. Which of the following is an example of Foreign Direct Investment (FDI)? (hpsc assistant professor commerce book and test series)

a) A company selling products to foreign markets

b) A company setting up a subsidiary in another country

c) A company licensing its technology to a foreign firm

d) A company exporting goods to another country

Answer: b) A company setting up a subsidiary in another country

Explanation: FDI involves a company directly investing in facilities or subsidiaries in foreign countries, which is different from exporting or licensing.

7. What is the term for reducing trade barriers to enhance international business? (hpsc assistant professor commerce book and test series)

(hpsc assistant professor commerce book and test series)

a) Protectionism

b) Liberalization

c) Tariffs

d) Subsidization

Answer: b) Liberalization

Explanation: Liberalization refers to the removal or reduction of trade barriers such as tariffs and quotas, allowing for freer international trade.

8. Which of the following is a characteristic of a multi-national corporation (MNC)? (hpsc assistant professor commerce book and test series)

a) It operates only within its home country

b) It does not engage in international trade

c) It manages operations in more than one country

d) It does not export goods or services

Answer: c) It manages operations in more than one country

Explanation: MNCs are companies that manage operations, production, or services in more than one country, making them a key part of international business.

9. Which of the following is an advantage of international business for a nation? (hpsc assistant professor commerce book and test series)

a) Increased unemployment

b) Access to a larger market for goods and services

c) Higher tariffs

d) Decreased foreign exchange reserves

Answer: b) Access to a larger market for goods and services

Explanation: One of the main advantages of international business for a nation is that it opens up larger markets for goods and services, leading to economic growth.

10. What does “Licensing” mean in the context of international business? (hpsc assistant professor commerce book and test series)

a) Opening a new branch in a foreign country

b) Allowing a foreign company to use a brand name or intellectual property

c) Exporting goods to a foreign market

d) Forming a joint venture with a foreign firm

Answer: b) Allowing a foreign company to use a brand name or intellectual property

Explanation: Licensing involves allowing a foreign company to use intellectual property (like a trademark, patent, or brand name) in exchange for royalties.

11. What is the significance of cultural awareness in international business? (hpsc assistant professor commerce book and test series)

a) It is irrelevant in global business

b) It helps businesses adapt to local market preferences and avoid miscommunication

c) It is only important for marketing teams

d) It solely affects the pricing strategies

Answer: b) It helps businesses adapt to local market preferences and avoid miscommunication

Explanation: Cultural awareness is critical in international business as it helps companies tailor their products, services, and communication strategies to local preferences and avoid misunderstandings.

12. Which of the following is NOT a characteristic of a globalized economy? (hpsc assistant professor commerce book and test series)

a) Increased interdependence between nations

b) Free flow of goods, services, and capital

c) Isolation of economies

d) Spread of technology and innovation across borders

Answer: c) Isolation of economies

Explanation: A globalized economy is marked by interconnectedness and the free flow of goods, services, and capital, whereas isolation contradicts globalization principles.

13. Which of the following is an example of "Franchising" as a mode of entry? (hpsc assistant professor commerce book and test series)

a) A company buys stock in a foreign company

b) A company opens a foreign subsidiary

c) A company allows a local entrepreneur to operate a store using its brand

d) A company exports products to a foreign market

Answer: c) A company allows a local entrepreneur to operate a store using its brand

Explanation: Franchising is an entry mode where a company allows a foreign individual or company to operate a business using its established brand and business model.

14. What is the effect of a strong exchange rate on international business? (hpsc assistant professor commerce book and test series)

a) It makes exports cheaper

b) It makes imports more expensive

c) It makes imports cheaper and exports more expensive

d) It does not affect international business

Answer: c) It makes imports cheaper and exports more expensive

Explanation: A strong exchange rate increases the price of a country’s exports abroad and reduces the cost of imports.

15. What is a Joint Venture in international business? (hpsc assistant professor commerce book and test series)

a) A company enters a foreign market by fully acquiring another company

b) Two or more companies form a new company to operate in a foreign market

c) A company establishes a subsidiary in a foreign country

d) A company licenses its product to a foreign firm

Answer: b) Two or more companies form a new company to operate in a foreign market

Explanation: A Joint Venture involves two or more companies partnering to create a new entity and share control over operations in a foreign market.

16. What is the primary challenge of international business? (hpsc assistant professor commerce book and test series)

a) Managing cultural diversity

b) Government restrictions

c) Trade barriers

d) All of the above

Answer: d) All of the above

Explanation: International business faces several challenges, including managing cultural differences, navigating government regulations, and overcoming trade barriers, all of which can complicate operations in foreign markets.

17. What does the term "global value chain" refer to? (hpsc assistant professor commerce book and test series)

a) The stages of production and service that span across different countries

b) A group of multinational corporations working together

c) The local supply chain within a single country

d) A government-led initiative to boost international trade

Answer: a) The stages of production and service that span across different countries

Explanation: A global value chain refers to the various stages of production, from raw materials to finished goods, that are spread across different countries, enhancing the global nature of supply and demand.

18. Which of the following is a disadvantage of global sourcing for businesses? (hpsc assistant professor commerce book and test series)

a) Increased quality control

b) Reduced costs of production

c) Dependence on foreign suppliers

d) Improved efficiency in manufacturing

Answer: c) Dependence on foreign suppliers

Explanation: Global sourcing can create dependency on foreign suppliers, leading to potential risks such as disruptions in supply chains due to geopolitical issues, natural disasters, or currency fluctuations.

19. What is the significance of World Trade Organization (WTO) in international business? (hpsc assistant professor commerce book and test series)

a) It regulates domestic business activities

b) It helps promote fair trade practices and resolve trade disputes between nations

c) It sets local taxes for international companies

d) It provides subsidies to small businesses in foreign markets

Answer: b) It helps promote fair trade practices and resolve trade disputes between nations

Explanation: The WTO plays a crucial role in regulating global trade, ensuring that trade policies are fair, and helping resolve disputes between countries through a legal framework.

20. Which of the following is a common risk associated with international business? (hpsc assistant professor commerce book and test series)

a) Currency exchange risk

b) Enhanced access to capital

c) Greater market stability

d) Increased domestic competition

Answer: a) Currency exchange risk

Explanation: Currency exchange risk arises from fluctuations in currency values, which can impact the profitability of international transactions, making it one of the key risks in international business.

21. Which of the following best describes the concept of "economic globalization"?(hpsc assistant professor commerce book and test series)

a) The rise of protectionist policies

b) The movement of people across borders

c) The integration of national economies into a global economy

d) The isolation of markets to protect local industries

Answer: c) The integration of national economies into a global economy

Explanation: Economic globalization refers to the increasing interdependence of national economies through trade, investment, and the movement of capital, goods, and services across borders.

22. What does the term "countertrade" refer to? (hpsc assistant professor commerce book and test series)

a) The trade of goods between two nations without the use of money

b) The process of trading intellectual property

c) The exchange of services instead of goods

d) A trade agreement that focuses on reducing tariffs

Answer: a) The trade of goods between two nations without the use of money

Explanation: Countertrade is a form of international trade where goods or services are exchanged directly for other goods or services, rather than money, often used in situations where currency exchange is difficult.

23. Which of the following is a form of direct investment in foreign markets? (hpsc assistant professor commerce book and test series)

a) Importing goods

b) Setting up a branch or subsidiary

c) Signing licensing agreements

d) Exporting goods

Answer: b) Setting up a branch or subsidiary

Explanation: Direct investment in foreign markets typically involves establishing a presence through a subsidiary or branch, allowing the company to control its operations directly in the foreign market.

24. What is "Tariff" in the context of international trade? (hpsc assistant professor commerce book and test series)

a) A tax imposed on imports and exports

b) A government subsidy to promote exports

c) An international agreement on trade

d) A global currency exchange rate

Answer: a) A tax imposed on imports and exports

Explanation: A tariff is a government-imposed tax on imports and/or exports, which can affect the cost and competitiveness of goods in international markets.

25. What does "dumping" mean in international trade? (hpsc assistant professor commerce book and test series)

a) Selling products below cost in foreign markets to gain market share

b) Selling high-quality products at premium prices in international markets

c) Exporting goods with high tariffs

d) Moving production to a lower-cost country

Answer: a) Selling products below cost in foreign markets to gain market share

Explanation: Dumping refers to the practice of selling goods at a price lower than the cost of production or in foreign markets at unfairly low prices to gain market share, often considered anti-competitive.

26. Which of the following is NOT a mode of entry into international markets? (hpsc assistant professor commerce book and test series)

a) Joint venture

b) Wholly owned subsidiary

c) Corporate social responsibility

d) Licensing

Answer: c) Corporate social responsibility

Explanation: Corporate social responsibility (CSR) is an ethical practice and responsibility of a company but not a mode of entry into international markets. Joint ventures, wholly owned subsidiaries, and licensing are all entry modes.

27. What role does political stability play in international business? (hpsc assistant professor commerce book and test series)

a) It increases the risks associated with foreign investment

b) It makes foreign markets less attractive

c) It lowers the costs of doing business internationally

d) It fosters a favorable environment for investment and trade

Answer: d) It fosters a favorable environment for investment and trade

Explanation: Political stability is crucial in international business as it provides a predictable environment, reduces risks, and encourages foreign investment and trade.

28. What is "market research" in the context of international business? (hpsc assistant professor commerce book and test series)

a) The study of the competition within a domestic market

b) The analysis of potential customers, competitors, and market conditions in foreign markets

c) The development of marketing strategies for local markets only

d) A legal process for obtaining business permits in foreign countries

Answer: b) The analysis of potential customers, competitors, and market conditions in foreign markets

Explanation: Market research in international business involves understanding the characteristics of foreign markets, including customer preferences, competitors, and local market conditions.

29. What is the main advantage of using a wholly owned subsidiary as an entry strategy? (hpsc assistant professor commerce book and test series)

a) Shared risk with local firms

b) Control over operations and intellectual property

c) Lower capital investment

d) Limited liability for the parent company

Answer: b) Control over operations and intellectual property

Explanation: A wholly owned subsidiary provides the parent company with full control over its operations and intellectual property in the foreign market, which is advantageous for maintaining quality and brand integrity.

30. Which of the following is NOT a feature of global strategic alliances? (hpsc assistant professor commerce book and test series)

a) Shared resources and expertise between firms

b) Reduced risk for both companies involved

c) Complete independence of the firms involved

d) Access to new markets and technology

Answer: c) Complete independence of the firms involved

Explanation: Global strategic alliances involve collaboration between firms, which includes sharing resources, expertise, and entering new markets. Complete independence is not a feature of alliances as it requires cooperation.

31. What is the primary disadvantage of exporting as an entry strategy? (hpsc assistant professor commerce book and test series)

a) High capital investment

b) Limited control over marketing and distribution

c) No exposure to foreign markets

d) Risk of losing intellectual property

Answer: b) Limited control over marketing and distribution

Explanation: While exporting allows businesses to enter foreign markets with lower investment, they often have limited control over the distribution and marketing of their products abroad.

32. What does "Free Trade" refer to in the context of international business? (hpsc assistant professor commerce book and test series)

a) Trade that is exempt from tariffs and other trade barriers

b) The act of exporting without a contract

c) The exclusive trade between countries with similar currencies

d) Trade agreements that increase government intervention

Answer: a) Trade that is exempt from tariffs and other trade barriers

Explanation: Free trade refers to the unrestricted flow of goods and services across borders without tariffs or other trade restrictions, promoting easier and more efficient international trade.

33. What is the primary goal of "regional integration" in international business? (hpsc assistant professor commerce book and test series)

a) To protect domestic businesses from international competition

b) To create a unified economic space for easier trade among neighboring countries

c) To eliminate international competition entirely

d) To develop a global currency

Answer: b) To create a unified economic space for easier trade among neighboring countries

Explanation: Regional integration aims to promote economic cooperation by reducing trade barriers and creating a unified economic zone between neighboring countries, such as the European Union or NAFTA.

34. Which of the following best describes the "licensing" mode of entry into international business? (hpsc assistant professor commerce book and test series)

a) A company builds its own production facility in a foreign country

b) A company allows a foreign company to use its intellectual property under agreed terms

c) A company acquires a local company in the target market

d) A company sells its products through third-party distributors

Answer: b) A company allows a foreign company to use its intellectual property under agreed terms

Explanation: Licensing involves granting a foreign company the right to use a company's intellectual property, such as patents or trademarks, in exchange for royalty payments.

35. What is a key advantage of franchising as a mode of entry into international markets? (hpsc assistant professor commerce book and test series)

a) Full control over operations and decision-making

b) High capital investment requirements

c) Rapid market penetration with relatively low risk

d) Direct ownership of foreign assets

Answer: c) Rapid market penetration with relatively low risk

Explanation: Franchising allows businesses to expand quickly with minimal investment, as the local franchisee bears most of the financial responsibility while following the parent company's business model.

36. Which of the following best describes the concept of "reverse innovation"?(hpsc assistant professor commerce book and test series)

a) Innovating products for high-income markets first

b) Innovating products in developed countries for use in developing countries

c) Bringing advanced technology from developing countries to developed countries

d) Repeating successful innovations in the home market

Answer: b) Innovating products in developed countries for use in developing countries

Explanation: Reverse innovation refers to the practice of developing low-cost products in emerging markets and then adapting them for sale in developed countries.

37. In international business, what is the "cash flow" effect? (hpsc assistant professor commerce book and test series)

a) The movement of cash across borders in the form of investments

b) The increase in financial risk due to exchange rate fluctuations

c) The net movement of cash into and out of a business from international operations

d) The decrease in sales due to foreign competition

Answer: c) The net movement of cash into and out of a business from international operations

Explanation: Cash flow in international business refers to the movement of money into and out of a company from international operations, including revenue from exports or investments in foreign markets.

38. Which of the following is an example of "greenfield investment" in international business? (hpsc assistant professor commerce book and test series)

a) A company buys an existing foreign company

b) A company sets up a new production facility from scratch in a foreign market

c) A company licenses its technology to a foreign firm

d) A company exports goods to a foreign market

Answer: b) A company sets up a new production facility from scratch in a foreign market

Explanation: Greenfield investment involves creating a new facility from the ground up in a foreign country, as opposed to acquiring or merging with an existing business.

39. Which of the following is NOT a reason for businesses to expand internationally? (hpsc assistant professor commerce book and test series)

a) To take advantage of cheaper labor costs

b) To reduce dependence on the domestic market

c) To protect the domestic market from competition

d) To access new markets for growth and profits

Answer: c) To protect the domestic market from competition

Explanation: Expanding internationally is typically done to access new markets, reduce reliance on the domestic market, and take advantage of cost efficiencies, not to protect the domestic market.

40. What is "global sourcing" in the context of international business? (hpsc assistant professor commerce book and test series)

a) The purchase of raw materials exclusively from the home country

b) The process of sourcing goods and services from the most cost-effective suppliers worldwide

c) The establishment of foreign subsidiaries

d) The development of products tailored for global markets

Answer: b) The process of sourcing goods and services from the most cost-effective suppliers worldwide

Explanation: Global sourcing involves obtaining goods and services from suppliers located around the world to take advantage of lower costs, better quality, or specific capabilities.

41. Which of the following is NOT a feature of "trade liberalization"?(hpsc assistant professor commerce book and test series)

a) Reduction of tariffs and trade barriers

b) Increased protectionism

c) Encouragement of free movement of goods and services

d) Greater integration of global markets

Answer: b) Increased protectionism

Explanation: Trade liberalization refers to reducing trade barriers and increasing the free movement of goods and services between countries, as opposed to protectionism, which involves imposing tariffs and restrictions.

42. What is the "Mature Market" strategy in international business? (hpsc assistant professor commerce book and test series)

a) Entering new, emerging markets with low competition

b) Focusing on markets where demand for products is saturated

c) Expanding into regions with lower product demand

d) Avoiding established markets to reduce competition

Answer: b) Focusing on markets where demand for products is saturated

Explanation: A mature market strategy involves targeting regions where products are widely used but the market is saturated, requiring innovative approaches to gain market share or extend product lifecycles.

43. What does the term "national competitive advantage" refer to in international business? (hpsc assistant professor commerce book and test series)

a) The ability of a country to attract foreign businesses by offering subsidies

b) The ability of a country to dominate a specific industry globally due to factors such as skilled labor, resources, and infrastructure

c) A country’s monopoly on certain products

d) The advantages that businesses gain by operating domestically rather than internationally

Answer: b) The ability of a country to dominate a specific industry globally due to factors such as skilled labor, resources, and infrastructure

Explanation: National competitive advantage refers to a country's ability to compete globally in a particular industry because of factors like skilled labor, infrastructure, and access to natural resources.

44. What is the primary goal of "offshoring"?(hpsc assistant professor commerce book and test series)

a) Moving domestic jobs to foreign countries to reduce costs

b) Selling goods in foreign markets at lower prices

c) Hiring employees from other countries to improve local employment

d) Increasing the cost of production

Answer: a) Moving domestic jobs to foreign countries to reduce costs

Explanation: Offshoring involves relocating business functions or production to foreign countries where labor or operational costs are lower, allowing companies to reduce their overall production costs.

45. Which of the following best defines "country risk" in international business? (hpsc assistant professor commerce book and test series)

a) The risk associated with fluctuations in currency exchange rates

b) The risk of political instability or adverse government policies in a foreign market

c) The risk that a country’s economy will grow too quickly

d) The risk of increasing tariffs or trade restrictions

Answer: b) The risk of political instability or adverse government policies in a foreign market

Explanation: Country risk refers to the risk that political instability, changes in government policies, or other factors in a foreign country may negatively impact business operatio

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VIVEK 17 March 2025

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