CS Foundation Scales of Business MCQ Questions

Question 1.

Which of these is an Indian Multinational Company?

(a) Hindustan Unilever
(b) Videocon
(c) Cargill
(d) Tesco
Answer:
(b) Videocon

Question 2.

A MN(c) is defined by an organisation

(a) Carrying out production in more than one country.
(b) Having sales in more than one country.
(c) Having a multi-ethni(c) workforce
(d) Having- suppliers in more than one country
Answer:
(a) Carrying out production in more than one country.

Question 3.

Which of the following is not the requirement in Partnership deed?

(a) Capital contribution by each partner
(b) Profit sharing
(c) Total assets of the partner
(d) Method of dissolution
Answer:
(d) Method of dissolution

Question 4.

Out of these which is not a function normally performed by the HR department?

(a) Recruitment and selection
(b) Pay and reward.
(c) Accounting
(d) Employee relations.
Answer:
(c) Accounting

Question 5.

For the economic and industrial development Micro, Small and Medium Enterprises play an important role such as

(1) They have the capacity to absorb skilled and unskilled labour available in the country.
(2) Such institutions provide lots of employment and allow income to get concentrated in few hands or in few areas.
(3) They help in eradication of poverty by providing self-employment opportunities. Select the correct option

(a) Only (1)
(b) Only (2)
(c) Only (3)
(d) Only (1) and (3)
Answer:
(d) Only (1) and (3)

Question 6.

For multinational activity, ‘Internalization’ means.

(a) To undercut the prices of ‘local’ producers in overseas markets as multinational have an approach and exposure to global market and their scale of production is large enough.

(b) To set up an overseas production operation because of the fear of franchising operations that has been given to ‘local’ firms already in the market.

(d) All of the above
Answer:
(c) Exploiting a well-established global brand image to dominate overseas markets.

Question 7.

The Multinational corporations provides lot of benefits as it

(a) Increases the transfer of technology between nations.
(b) They always produce the goods.
(c) Host countries progress is mostly dependent on them.
(d) None of the above.
Answer:
(a) Increases the transfer of technology between nations.

Question 8.

Which of the following is not the disadvantage of MNC?

(a) Strain on foreign exchange reserve of the host country
(b) More employment opportunities
(c) Creation of monopolies
(d) May kill domesti(c) industry.
Answer:
(b) More employment opportunities

Question 9.

The characteristics feature of a multinational enterprise (MNE) include

(a) It owns its subsidiaries in other countries
(b) It may operate in another country
(c) These are established due to difference in the rate of return on capital between the two countries
(d) Both (a) and b.
Answer:
(d) Both (a) and b.

Question 10.

It is NOT a large scale industry;

(a) IT industry
(b) Telecom
(c) Sugar industry
(d) Fashion technology
Answer:
(d) Fashion technology

Question 11.

It is common to find micro enterprises in developing countries because

(a) Relative lack of formal section jobs.
(b) Relative lack of workforce.
(c) Relative lack of resources.
(d) Relative lack of income.
Answer:
(a) Relative lack of formal section jobs.

Question 12.

Micro enterprises depend more on micro credit because.

(a) They need less loans
(b) They do not have access to commercial banking system.
(c) They are entrepreneurs
(d) None of the above.
Answer:
(b) They do not have access to commercial banking system.

Question 13.

For a manufacturing enterprise to come under the preview of micro enterprise the total investment should not be more than.

(a) Rs. 25 lakhs
(b) Rs. 20 lakhs
(c) Rs. 50 lakhs
(d) Rs. 15 lakhs
Answer:
(a) Rs. 25 lakhs

Question 14.

For a small scale industry it is not UNCOMMON to be

(a) More labor intensive than larger organization
(b) Less labor intensive than larger organization
(c) Not at all labor intensive
(d) None of the above.
Answer:
(a) More labor intensive than larger organization

Question 15.

Multinational Corporations can be defined as a firm which:

(a) is having all the government benefits of the origin country
(b) is counted amongst the biggest industries in the host country
(c) Owns companies in more than one country
(d) All of the above
Answer:
(c) Owns companies in more than one country

Question 16.

Some MNCs have their economy as large as the economy of many developing countries. For instance, Wal-Mart.

(a) False
(b) True
(c) Not relevant
(d) None of the above
Answer:
(b) True

Question 17.

Which can be a disadvantage to the home country of MN(c) investment?

(a) Transfer of capital from home country to host country.
(b) No employment to the people.
(c) Both a and b
(d) None of the above
Answer:
(b) No employment to the people.

Question 18.

Coir industry is a

(a) Medium scale industry
(b) Medium small scale industry
(c) Traditional small scale industry
(d) Large industry
Answer:
(c) Traditional small scale industry

Question 19.

The factors that make enormous opportunities for SSI are

(a) Project profiles
(b) Less capital intensive
(c) Tooling and testing support
(d) All of the above.
Answer:
(d) All of the above.

Question 20.

Macro-environment is concerned with

(a) Socio-cultural and demographers
(b) Political and legal
(c) Technology.
(d) Above all.
Answer:
(d) Above all.

Question 21.

If the investment in fixed assets of plant and machinery does not exceed one crore Rupees then that is

(a) Tiny industry
(b) Village industry
(c) Small scale industry
(d) Cottage industry
Answer:
(c) Small scale industry

Question 22.

Branch office kind of business form

(a) Can undertake any activity.
(b) Can undertake activity which is specifically permitted.
(c) Can work without being registered with Registrar of Companies,
(d) Can not carry on research work.
Answer:
(c) Can work without being registered with Registrar of Companies,

Question 23.

Which of the following statement is true for small scale industries?

(a) Four persons are employed for 1,00.000 of rupee investment
(b) Small scale industries are less labour intensive than larger organisation.
(c) They are not good for income generation.
(d) Opportunities in small scale industries are rare.
Answer:
(d) Opportunities in small scale industries are rare.

Question 24.

We read in the newspaper that the foreign direct investments are preferred over the capital inflow. In this context, please consider the following. Which statement is more suitable for this statement?

(a) FDI brings in latest technology
(b) FDI does not involve large outflow
(c) FDI improves efficiency of the economy
(d) None of the above
Answer:
(a) FDI brings in latest technology

Question 25.

Which of the following pairs of MNC and the countries where they are headquartered is/one correctly matched?

1. Mero-Germany
2. Walmart -USA
3. Tesco- UK
4. Carore four-France

(a) 123 only
(b) 1,2,3
(c) 4,1,2
(d) 1,2,3 and 4
Answer:
(a) 123 only

Question 26.

International trade in goods and services is sometimes used as a substitute for all of the following except

(a) International movements of capital.
(b) Domesti(c) production of different goods and services,
(c) International movement of labour .
(d) International movement of technology
Answer:
(b) Domestic production of different goods and services,

Question 27.

International trade is based on the idea that

(a) Exports should exceed imports
(b) Resources are less mobile internationally that are goods
(c) Resources are more mobile internally than are goods.
(d) Imports should not be there.
Answer:
(b) Resources are less mobile internationally that are goods

Question 28.

Technological improvements are -similar to international trade since both.

(a) Increase the nation’s aggregate income.
(b) Reduced unemployment for all domesti(c) markers.
(c) Neither helps in exports nor in imports.
(d) Make loss to nation.
Answer:
(a) Increase the nation’s aggregate income.

Question 29.

A MNC is defined by an organisation

Question 30.

New incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners:

(a) As their old profit ratio
(b) According to new ratio
(c) According to sacrifice ratio
(d) None of these
Answer:
(a) As their old profit ratio

Question 31.

Micro, Small and Medium Enterprises play an important role in a country’s economic and industrial development that is

(a) Only (1)
(b) Only (2)
(c) Only (3)
(d) Only (1) and (3)
Answer:
(d) Only (1) and (3)

Question 32.

Out of the following schemes which scheme launched by the Government of India aims at enhancing the livelihood security of the people in rural areas by guaranteeing hundred days of employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work?

(a) Pradhan Mantri Gram Sadak Yojana
(b) Kutir Jyoti Scheme
(c) ASHA
(d) MGNREGA
Answer:
(d) MGNREGA

Question 33.

The problem faced by small Business is/are

(a) Lack of adequate finance
(b) Outdated technology
(c) Shortage of raw materials
(d) All
Answer:
(d) All

Question 34.

Which of the following is not a key advantage of MNC?

(a) Technology movement
(b) Support enterprises in host countries
(c) Product duplication
(d) Provide services to professionals
Answer:
(c) Product duplication

Question 35.

Which of the following is an example of a multinational corporation?

(a) McDonald’s
(b) Nirma
(c) World trade organization
(d) United Nations Organization
Answer:
(a) McDonald’s

Question 36.

Home location for most of the world’s MNC is at

(a) America.
(b) America and Asia.
(c) Europe.
(d) Singapore.
Answer:
(a) America.

Question 37.

Multinational corporations, sometimes provide benefits to their home countries, except which one?

(a) Boost the industrial development in home country
(b) Allow for production of cheaper components for their products
(c) Marketing opportunities for the products produced in home country,
(d) Shift home country technology overseas via licensing
Answer:
(d) Shift home country technology overseas via licensing

Question 38.

Multinational corporation’s trade analysis differs from our conventional trade analysis because multinational corporation analyses

(a) Purely competitive markets rather than regular markets.
(b) The international movement of inputs as well as the movement of finished goods.
(c) Absolute cost differentials rather than comparative cost differentials.
(d) None of the above.
Answer:
(b) The international movement of inputs as well as the movement of finished goods.

Question 39.

The advantage of Multinational corporations is

(a) Business gets management expertise from MNC.
(b) Always enjoy political harmony in host countries in which their subsidiaries operate.
(c) Enjoy subsidies from government in order to conduct worldwide operations.
(d) Both a and b.
Answer:
(a) Business gets management expertise from MNC.

Question 40.

Liaison office act as a communication channel between

(a) Foreign corporation and Indian customers.
(b) Foreign corporation and educational institutes.
(c) Foreign corporation and art galleries.
(d) None of the above.
Answer:
(a) Foreign corporation and Indian customers.

Question 41.

The Multinational corporations

(a) Always do the marketing of the primary goods.
(b) Always produce manufactured goods.
(c) Always do the marketing of the manufactured goods.
(d) None of the above.
Answer:
(d) None of the above.

Question 42.

Below mentioned are the features of a public enterprise except

(a) Its primary objective is to serve Government departments
(b) They are not accountable to public
(c) In some specific areas, they have monopoly.
(d) Both (a) and b.
Answer:
(d) Both (a) and b.

Question 43.

MNC . Select the most suable

(a) are Indian companies that trade their securities on the other countries exchange.
(b) are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries
(c) are doing business at a large scale for public
(d) are Indian companies that sell goods and services in other countries
Answer:
(b) are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries

Question 44.

A foreign corporation may open its Project office

(a) Without permission from Reserve Bank of India
(b) With permission from Reserve Bank of India
(c) Only for research work
(d) Both b and c
Answer:
(b) With permission from Reserve Bank of India

Question 45.

The Act formed for the development of Micro, small and medium enterprises is

(a) Micro, Small and Medium Enterprises Development Act, 2005
(b) Micro, Small and Medium Enterprises Development Act, 2006
(c) Micro, Small and Medium Enterprises Development Act, 2004
(d) Micro, Small and Medium Enterprises Development Act, 2003
Answer:
(a) Micro, Small and Medium Enterprises Development Act, 2005

Question 46.

What is true for Branch office?

(a) It is not allowed to carry on manufacturing activity on its own.
(b) It is allowed to carry on manufacturing on its own.
(c) It is allowed to carry on business without the permission of RBI
(d) None of the above.
Answer:
(a) It is not allowed to carry on manufacturing activity on its own.

Question 47.

Which type of company should be formed depends on.

(a) Liability
(b) Control
(c) Both a and b
(d) None of the above.
Answer:
(c) Both a and b

Question 48.

For an service sector enterprise to come under the preview of micro enterprise the total investment in plant and machinery should not be more than.

(a) Rs. 25 lakhs
(b) Rs. 20 lakhs
(c) Rs. 50 lakhs
(d) Rs. 10 lakhs
Answer:
(d) Rs. 10 lakhs

Question 49.

From below mentioned which is large-scale industry?

(a) Fertilizer
(b) Natural gas
(c) Banking
(d) All of the above.
Answer:
(d) All of the above.

Question 50.

Which is not likely to be a benefit that host countries will obtain from MNCs?

(a) Technology Transfer
(b) Import substitution
(c) Tax revenues
(d) Job creation
Answer:
(c) Tax revenues

Question 51.

In 1979-80 the ratio of total output is to total, share in employment for Traditional small scale industry is

(a) 135: 56%
(b) 135: 74%
(c) 135: 33%
(d) 135: 36%
Answer:
(a) 135: 56%

Question 52.

Invariably a drawback of traditional small scale industry is

(a) They can not provide employment for whole year
(b) They require high labour employment
(c) They can earn only foreign exchange
(d) None of the above.
Answer:
(a) They can not provide employment for whole year

Question 53.

Glass industry is a

(a) Small scale industry
(b) Cottage industry
(c) Traditional small scale industry
(d) Mega industry
Answer:
(a) Small scale industry

Question 54.

40% of the Indian economy gross value is given by

(a) Small scale industry
(b) Micro scale industry
(c) Micro industry
(d) Publi(c) Enterprises
Answer:
(a) Small scale industry

Question 55.

Which one of the following is true about micro enterprises?

(a) Labour intensive
(b) Capital intensive
(c) Technology intensive
(d) None of the above.
Answer:
(a) Labour intensive

Hint:
Micro enterprises has been recognised as an engine of growth ail over the worl(d) The sector is characterised by low investment requirement, labour intensive, operational flexibility, location-wise mobility and import substitution.

Question 56.

Which one of the following is a key in the firm’s growth phase?

(a) Increase in scale
(b) Increase in profit
(c) Increase in capital
(d) All of the above
Answer:
(b) Increase in profit

Question 57.

In which year was the new economic policy ushered that gave a new direction to Indian economy?

(a) 1993
(b) 1989
(c) 1991
(d) 1985
Answer:
(c) 1991

Hint:
On 24th July, 1991 the Government of India announced its industrial policy to improve the performance of business organisation.

Question 58.

The definition of Micro, Small and Medium Enterprises (MSMEs) in India is based on:

(a) Total sales of the unit
(b) Investment in machines and equipments
(c) Market coverage
(d) Export turnover.
Answer:
(b) Investment in machines and equipments

Hint:
Enterprises have been classified under the Micro, Small and Medium Enterprises Development Act, 2006. According to this Act enterprises are classified into micro, small and medium based on investment in plant and machinery and in equipments respectively.

Question 59.

Which one of the following is a push factor influencing the internationalisation of a company?

(a) Difficulty in finding skilled staff in the home country
(b) The need to be close to key resources
(c) Low-cost labour in other countries
(d) Financial incentives from governments in emerging markets
Answer:
(c) Low-cost labour in other countries

Hint:
Some of the reasons why companies wish to become multinationals are

To secure cheaper premises and labour- cost of land and labour will be cheaper in developing countries.
To increase market share- companies may find they are at saturation point in the domesti(c) market and need a new outlet. They may start by exporting to other countries but eventually they will-want to being production overseas

Question 60.

The abbreviation ‘BIFR’ with reference to sick companies in India means:

(a) Board for Indian Financial Reserves
(b) Board for Industrial and Financial Resources
(c) Board for Industrial and Financial Reconstruction
(d) Board for International Fund Reserves.
Answer:
(c) Board for Industrial and Financial Reconstruction

Question 61.

Foundation of public enterprises in India was laid down by:

(a) Indira Gandhi
(b) Jawaharlal Nehru
(c) Dr. Rajendra Prasad
(d) Dr. S. Radhakrishnan Questions of December 2013
Answer:
(b) Jawaharlal Nehru

Question 62.

Transfer pricing litigations are generally related to

(a) Domestic Companies
(b) Multinational Companies
(c) Public Enterprises
(d) Statutory Authority
Answer:
(b) Multinational Companies

Hint:
Transfer pricing is the setting of the price for goods and services sold between controlled or related legal entities within an enterprise. It is one of the disadvantage associated with MN(c) Transfer pricing is used as a profit allocation method to attribute a multinational corporation’s net profit (or loss) before tax to countries where it does business. Thus MNC use it to avoid tax.

Question 63.

Coca-Cola is an example of:

(a) MNC
(b) Indian Company
(c) Foreign Company
(d) None of these .
Answer:
(a) MNC

Hint:
A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation that is registered in more than one country or that has operations in more than one country.

Question 64.

…….. is responsible for revival of Public Sector Enterprises.

(a) NTPC
(b) BIFR
(c) BRPSE.
(b) MNC
Answer:
(b) BIFR

Hint
The Board for Industrial and Financial Reconstruction (BIFR) is an agency of the government of India for revival and rehabilitation of business enterprises.

Question 65.

Microsoft is a:

(a) Indian Government Company
(b) Multinational Company,
(c) Statutory Corporation
(d) Public Limited Company
Answer:
(b) Multinational Company,

Question 66.

Advantages of multinationals to home countries are

(a) Ensure optimum utilisation of resources
(b) Promote bilateral trade relations .
(c) Promote global Co-operations
(d) All of the above
Answer:
(d) All of the above

Hint:
Advantages of MNC’s to Host Countries

The companies bring much needed money into the country.
The companies help the development of the country by bringing in technology and knowledge that the host country does not possess.
Multinationals create jobs which boosts the local economy and more workers to tax.
Multinationals are in a position to benefit from economies of scale. This means the cost per unit can be lowered through specialisation – with a large workforce work can be divided up and people can do their limited job expertly.
The new companies often help to improve transport links around the area.
The new multi-national companies act as growth poles for other similar companies. They could encourage more companies to locate in that country once they see the benefits that it brings.
The host country’s business also gets management expertise from MNC’s.
The domesti(c) traders and market intermediaries of the host country gets increased business from the operation of MNC’s.
The host country can reduce imports and increase exports due to goods produced by MNC’s in the host country. This helps to improve balance of payment.
Their size and scale of operation enables them to benefit from economies of scale enabling lower average costs and prices for consumers. This is particularly important in industries with very high fixed costs, such as car manufacture and airlines.

Question 67.

For the goods having artistic features size of enterprise is preferred.

(a) Small scale
(b) Large scale
(c) Corporation
(d) Very large scale
Answer:
(a) Small scale

Hint:
Small scale enterprises employ local resources like raw material, artistic features, entrepreneurial skill
more effectively like khadi, village industry.

Question 68.

Which is not a criterion for defining small business?

(a) Usually employs fewer people
(b) Is Geographically localised
(c) Is considered smaller in relation to competitors
(d) Financed by a large number of investors.
Answer:
(d) Financed by a large number of investors.

Hint:
Small scale industries are the industries which are organized on a small scale and produce goods with the help of small machines, hired labour and power.

Question 69.

Push factors for locating a business includes:

(a) Availability of skilled labour
(b) Rising competition in an area
(c) Government support
(d) Technological advancement
Answer:
(b) Rising competition in an area

Hint:
Push factors include rising competition in an area, rising costs, poor communications systems, falling demand, there are a number of push and pull factors drawing firms towards certain locations and away from others. Factors that draw a business away from a certain location are “push” factors.

Question 70.

The size and structure of business depends on many factors which (are):

(a) Arbitrary and random
(b) In the control of enterprises
(c) Range from internal to external factors which are beyond the control of enterprises
(d) Beyond the control of enterprises
Answer:
(c) Range from internal to external factors which are beyond the control of enterprises