International Business Testing 1 (Direct questions) Distinguish between Domestic Business and International Business.

. (2) What is International Business? Explain the risks involved in International Business. (3) What is the scope of International Business? (4) Write short notes on: (a) Indirect and Direct Export. (b) Licensing (c) Franchising (d) Contract Manufacturing (e) Joint Venture (f) Wholly Owned Subsidiaries (5) Explain in detail the Export Procedure with documentation involved in it. (6) Explain in detail the import Procedure with documentation involved in it. (7) What do you mean by Foreign Trade Promotion? Explain the incentives / measures and schemes for promoting foreign trade. (8) Explain briefly the organizational support for promoting foreign trade. (9) Explain International Trade Institutes and Trade Agreement. (10) Explain the various WTO agreements in detail. (11) Distinguish between the following: (i) Direct Export and indirect Exporting. (ii) Domestic and International Business. (iii) Pre-shipment Finance and Post Shipment Finance. (iv) Bill of Lading and Airway Bill. (v) Licensing and Franchising. (vi) Sight Draft and Usance Draft. (vii) Import and Export. (12) State True or False. Give reasons: (1) The WTO is the only global International organisation dealing with the Rules of trade. (2) To avail concessions on tariffs for goods coming from a particular country, certificate of origin is not required.
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(4) (5) (6) (7) (8) (9)

(10)

(11) (12)

The port trust dues, levied by the Landing & Shipping Dues Offices, are also to be paid by the importer. Advance License Scheme is a duty exemption scheme. India is a founder member of the WTO. Licensing is a form of direct export. Letter of Credit is required for obtaining export license. Bill of entry is not a part of export documents. When the trader of one country purchases the goods from the trader of another country, it is known as export trade. Wholly owned subsidiaries means establishing a firm that is jointly owned by two or more independent firms. India has not made any commitments to WTO. India does not get any advantage from WTO.

Testing II Q.1. (A) Select the proper option from the options given below and rewrite the sentences:
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(2)

(3)

(4)

(5)

(6)

When a company directly invests in properties such as Plant and Machinery in foreign countries, _____ takes place. (a) Portfolio Investment, (b) Indirect exporting, (c) direct investment. Selling of products to a foreign country directly through its distribution arrangements or through a host (another) countrys company is _______. (a) Direct Exporting (b) Indirect Exporting (c) Importing When both countries enter into a mutual exchange of technology and patents, it is known as ________. (a) Licensing (b) Cross Licensing (c) Contract Manufacturing. Under _______, an independent organisation operates the business under the name of another company. (a) Joint Venture (b) Licensing (c) franchising _______ is one of the modes of entry which has high level of risks. (a) Licensing (b) Franchise (c) Joint Venture Major items __________ are chemicals, crude oil and petroleum products, edible oils, electronic goods, gold and silver, pearl and precious stones, etc. (a) Exported by India (b) not exported by India (c) imported by India.

In ________, the parent company makes 100% investment in its equity capital and thus acquires full control over the foreign company. (a) Contract Manufacturing (b) Wholly owned Subsidiaries (c) Foreign Companies. (8) The export order comprises of a _______ which is an offer made by exporter indicating his intention to sell. (a) Registration (b) Letter of Credit (c) Proforma invoice. (9) For customs clearance, the ______ is prepared by the exporter. (a) Carting Order (b) Letter of Origin (c) Shipping Bill (10) The shipping company issues a _______ which is evidence that the company has accepted the goods by shipping. (a) Packing List (b) Airway Bill (c) Bill of Lading. (11) _______ is an example of MNC. (a) Samsung (b) ONGC (c) LIC (12) _______ is an example of licensing as it produces and sells its product all over the world through local bottlers in foreign countries. (a) Pepsi (b) McDonalds (c) Unilever (13) _______means selling of products by a company to its affiliated company in another country. (a) Direct Exporting (b) Indirect Exporting (c) Intra-Corporate transfers. (14) Under ________ mode of entry for direct export, the manufacturer gives right to use of technology, work methods, copyrights and patents, brand names, trademarks, etc. to a manufacturer for its product in foreign country. (a) Franchising (b) Licensing (c) wholly owned subsidiary (15) _____ is applied to services and is a form of licensing. (a) Contract Manufacturing (b) Joint Venture (c) Franchising (16) In ________ mode, an international company enters into a long term contract with a local firm to undertake production of specified goods for a given period for subsequent sale by the former. (a) Licensing (b) Franchising (c) Contract Manufacturing
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(17) A

______ is an instrument of payment, containing detailed terms and conditions for shipment of goods. (a) Purchase Order (b) Proforma invoice (c) Letter of Credit (18) _________ is a guarantee issued by the Importers bank th at it will honour payments of export bills upto a certain amount. (a) Bill of Exchange (b) Cheque (c) Letter of Credit (19) _______ is a proof that the goods are actually manufactured in the country from which the export took place. (a) Letter of Credit (b) Bill of Lading (c) Certificate of Origin. (20) The headquarters of WTO is located at __________. (a) Geneva (b) Tokyo (c) Washington DC. (21) The World Bank is headquartered in _____. (a) Geneva (b) Washington DC (c) France. Q.1. B. Match the following pairs: 1. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Group A Intangible Goods Franchising System FDI I.E.C. Airway Bill Joint Venture Direct Export SEEPZ WTO IMF (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Group - B Importer Exporter Code Shorter Distribution Channel When the goods are sent by air. When the goods are sent by road. Shared Ownership Fast Food Chain of Restaurants Visible goods Invisible goods Global International Trade Organisation Foreign Direct Investment
Export of electronics and gems and jewellery

Global Monetary Co-operation Group - B Export inspection Council

Selling a product directly to a foreign country

2.
(1) (2) (3) (4) (5)

Group A IMF India llP GATS Direct Exporting STC (a) (b) (c) (d)

(6) (7)

Selling a product by a company to its affiliated company. Full control over external marketing Programme.

(8) (9) (10) (11)

WTO
Contract Manufacturing

EIC EPC
Intra Corporate Transfers

(e) (f) (g) (h) (i) (j) (k)

Founder member of WTO Organisation of 187 countries Organisation of 153 countries. General Agreement on Trade in Services State Trade Corporation of India Ltd. Indian Institute of Packaging Export Promotion Council.

Q.1. (C) Fill in the blanks and rewrite the sentences Sending tangible goods to foreign countries refers to _______ of goods. (2) Bringing tangible goods from foreign countries to ones own country means _____ of goods. (3) An investment that a company makes into another company by acquiring shares or providing loans is known as ________ investment. (4) When two or more firms come together to form a new business having separate and distinct legal entity different from its parent firms, a ______ is formed. (5) The refund of excise duty paid is known as _____ drawback. (6) _______ contains instructions to the Capital of the Ship that the custom cleared goods can be received on board. (7) Once the goods are loaded on the ship, the Captain of the ship issues a ____ receipt. (8) The only global international organisation dealing with the rules of trade between nations is ________. (9) The ______ contains instructions to permit the entry of the Cargo into the dockyard. (10) _______ Agent is involved in Foreign trade transactions. (11) In case of ______ bill of exchange, the documents are handed over to the importer only against payments. (12) In case of ______, the documents are handed over against the acceptance of bill of exchange. (13) Once the goods are loaded on the vessel, the exporter sends a _______ to the importer indicating details about the goods shipped.
(1)

India there are ______ Export Processing Zone (EPZs) to promote industrial and commercial exports. (15) EPZs have now been converted to ______ which are free from all rules and regulations governing imports and exports units except those in areas of banking and labour. (16) The ________ regulates, develops and promotes Indias International tra de and commerce by formulating appropriate policies. (17) _______ Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco, coir and silk. (18) The ______ scheme enables exporting companies to obtain a refund of customs duty paid on imported goods where those goods will be treated or processed into other goods for export. (19) The ______ finance is given to the exporter from the date of extending credit after the shipment of goods. (20) The _____ finance is provided to the exporter for manufacturing, purchasing, processing and packaging of goods for export. (21) ______ was replaced by WTO in 1995. (22) _____ agreement allows WTO members to choose which service sectors to open up to trade and foreign competitor. (23) Trade Related ______ relate to patents and copyrights. (24) All companies involved in exports need to obtain an Importers Exporters code from the ______. (25) Registration with _____ safeguards exporters against risks of non payments. (26) _____ is a vital source of financial and technical assistance to developing countries around the world.
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Q.1.D. Write the word of phrase or a term which can substitute each of the following statements:
(1) (2) (3)

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The goods which cannot be seen or touched. Name of the firm which is temporary partnership. Name the international organisation which is dealing with rules of trade between nations. International organisation which promotes monetary co-operation, growth, stability and poverty reduction.

Q.2. Write short notes on the following: Contract Manufacturing (2) Joint Venture (3) Wholly owned subsidiaries. (4) International Business. (5) IEC Number. (6) Pre-Shipment Finance. (7) Shipping bill. (8) Bill of Lading. (9) Formalities involved in getting export license. (10) Procedure related to excise clearance of goods. (11) Process of Customs Clearance of export of goods. (12) Letter of Credit (13) ITPO. (14) IMF. (15) World Bank (16) STC (17) IIFT. (18) IIP (19) WTO (20) Export Promotion Council (SPC).
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Q.3. Write short answers for the following:

(1) (2) (3) (4) (5)

What are the advantages and disadvantages of indirect exports? What is licensing? What are the advantages of licensing? Why is Joint Venture useful? Why is trade enquiry essential in Import Trade? Explain the meaning of the following documents used in connection with import transactions: (a) Trade Enquiry (b) Import license (c) Shipment Advice (d) Import General Manifest. (e) Bill of Entry.

Q.4. Answer the following questions in detail:

(1) (2) (3) (4) (5) (6) (7) (8)

Explain briefly Export-Import procedures and Documentation. Explain licensing and franchising. Discuss advantages and disadvantages. What is World Bank? Discuss the role and objectives. Which is IMF? Discuss its various objectives and functions. Write the features, objectives and functions of WTO. What are the advantages and disadvantages of direct export? Explain the various mode of entry into International Business. Explain the international Trade Agreement of WTO. *******