Deck 3: International Trade, Investment, and Financial Institutions

Question 1

Both foreign direct investment (FDI) and foreign institutional investment (FII) are related to investment in a country. Which of the following is incorrect regarding FDI and FII?

A)Both FII and FDI bring capital into the economy.
B)FII invests in technology-oriented enterprises, whereas FDI invests in traditional business set ups.
C)The restrictions on the entry of FDI are lower than that on FII.
D)FDI is considered to be more stable thna FII. FII can be withdrawn even at a short notice.

Answer 1

FII invests in technology-oriented enterprises, whereas FDI invests in traditional business set ups.

Question 2

Which of the following statements is/are correct regarding FDI under automatic route?
1) FDI in India under the automatic route does not require prior approval either by the Government of India or the Reserve Bank of India.
2) Investors are only required to notify the concerned regional office of the RBI before receipt of inward remittances and file required documents with that office before the issue of shares to foreign investors. Select the correct answer using the codes given below.

A)1 only
B)2 only
C)Both 1 and 2
D)Neither 1 nor 2

Answer 2

Both 1 and 2

Question 3

Which of the following are the components of foreign capital?
1) Grants and loans
2) External commercial borrowings
3) Foreign direct investment
4) Deposits from non-residents
Select the correct answer using the codes given below.

A)1, 2, 3, and 4
B)1, 2, and 4 only
C)1 and 2 only
D)3 and 4 only

Answer 3

1, 2, 3, and 4

Question 4

The value of Special Drawing Right (SDR) is determined by the basket of ......currencies.

A)4
B)5
C)6
D)7

Question 5

Which of the following is not the objective of the IMF?

A)To promote international monetary cooperation
B)To ensure balanced international trade
C)To ensure exchange rate stability
D)To provide loan to private sectors

Question 6

If the Balance of Payment of a country is adverse, then which institution will help that country?

A)World Bank
B)World Trade Organization
C)International Monetary Fund
D)Asian Development Bank

Question 7

Which of the following is known as the Paper Gold?

A)US Dollar
B)Pound
C)Demand draft
D)Special Drawing Right

Question 8

Why the World Bank was established?

A)To promote the International Trade
B)To reconstruct the economies damaged during the Second World War
C)To improve the adverse Balance of Payment situation of the nonmember countries
D)None of the above

Question 9

Which of the following statement is correct?

A)Every member country of the IMF automatically becomes the member of the World Bank
B)The World Bank has 45 founder members
C)India is not the founding member of the World Bank
D)IMF is the part of World Bank group

Question 10

The main focus of IBRD and IDA is on ___________:

A)Developed Countries
B)Developing Countries
C)Both of The Above
D)None of The Above

Question 11

The president is selected by the board of executive directors for a ____year, renewable term:

A)5 Year
B)3 Year
C)4 Year
D)None of The Above

Question 12

Which of the following does not form part of current account under balance of payments?

A)Export and import of goods
B)Export and import of services
C)Income receipts and payments
D)Capital receipts and payments

Question 13

Which of the following pairs is not correctly matched with regard to balance of payment accounts?

A)Import of goods and services - Debit in the current account
B)Receipts of transfer payments - Credit in the current account
C)Direct investment receipt - Credit in the capital account
D)Portfolio investment payments - Debit in the current account

Question 14

A country is said to be in debt trap if

A)It has to abide by the conditionality imposed by the International Monetary Fund
B)It is required to borrow money to make interest payments on outstanding loans
C)It has been refused loans or aid by creditors
D)The World Bank charges a very high rate of interest on outstanding as well as new loans

Question 15

Balance in capital account refer to the

A)Nation's net exports of goods and services
B)Nation's net exports of financial claims
C)Nation's net exports of international official reserve assets
D)Nation's sum of net exports of goods, services and financial claims

Question 16

Which of the following statement is not true about the WTO?

A). WTO is a permanent organisation
B). Uruguay round gave the birth to the WTO
C).Ministerial Conference is the highest policy making body of the WTO
D).WTO was officially constituted on 1 January 1991.

Question 17

Which of the following is not the objective of the WTO?

A). To improve the standard of living of peoples of the member countries
B). To enlarge production and trade of goods
C). To protect environment
D). To improve the Balance of Payment situation of the member countries

Question 18

Which of the following body is not related to the WTO?

A). Dispute Settlement Body
B).Trade Policy Review Body
C). Council of trade in goods
D). Exchange Rate Management Body

Question 19

Which of the followings are called Brettonwoods Twins?

A)IMF & International Bank for Reconstruction and Development (IBRD)
B)IMF & World Trade Organisation
C)IBRD & World Trade Organisation
D)None of the above

Question 20

Which of the following institution is associated with Dunkel Proposals?

A)World Bank
B)International Monetary Fund
C)World Trade Organization
D)United Nations Organization

Question 21

As per Indian GAAP Financial statements are prepared at :

A)Market value
B)Fair value
C)Cost
D)All of the above

Question 22

total no. Of IFRS is

A)14
B)16
C)17
D)18

Question 23

How many Ind As are there in India

A)21
B)39
C)41
D)32

Question 24

The accounting standards are mandatory for

A)Sole proprietor
B)Companies
C)Firms
D)societies