Business Environment

31. When MNCs reduce their tax bill in different host countries this is usually done by a technique called:

  1. Technology transfer.
  2. Transfer pricing.
  3. Import substitution.
  4. Product switching.
Correct answer: (B)
Transfer pricing.

32. Banking sector will fall under which of the following sectors?

  1. Agricultural sector
  2. Service sector
  3. Manufacturing sector
  4. Industrial sector
Correct answer: (B)
Service sector

33. The Plan Holiday refers to the period

  1. 1965-68
  2. 1966-69
  3. 1967-70
  4. 1978-80
Correct answer: (B)
1966-69

34. The New Economic Policy launched in 1991 consist of

  1. Stabilization policy
  2. Import control policy
  3. Deficit financing
  4. Structural adjustment policy
  1. i. only
  2. i, iii. and iv.
  3. ii. and iv.
  4. i. and iv
Correct answer: (D)
i. and iv

35. An MNC (multinational company or corporation) can be defined as a firm which:

  1. Is beyond the control of any government.
  2. Is one of the largest 200 firms in the world?
  3. Operates directly or owns subsidiaries in more than one country
  4. All of the above
Correct answer: (C)
Operates directly or owns subsidiaries in more than one country

36. Which two of the following are regarded as the main aims of the World Trade Organisation (WTO)?

  1. To eliminate discrimination in world trade
  2. To provide financial assistance to countries with debt
  3. To reduce tariff barriers
  4. To make 'infant industry' protection illegal
  5. To help give preferences to smaller economies
  1. (b) and (d)
  2. (a) and (c)
  3. (d) and (e)
  4. (b) and (d)
Correct answer: (B)
(a) and (c)

37. In a flexible exchange-rate system, an increase in the domestic interest rate would tend to

  1. Improve the current account and worsen the capital account
  2. Improve the capital account and worsen the current account.
  3. Improve both the current and the capital accounts.
  4. Worsen both the accounts.
Correct answer: (C)
Improve both the current and the capital accounts.

38. India has

  1. Parliamentary form of government
  2. Presidential form of government
  3. Both parliamentary and presidential form of government
  4. None of these
Correct answer: (A)
Parliamentary form of government

39. The President of India is elected by

  1. Parliament (i.e. both the Lok Sabha and the Rajya Sabha)
  2. By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.
  3. Together by the Central and the State governments
  4. By the people directly
Correct answer: (B)
By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.

40. VAT is imposed

  1. Directly on consumer
  2. On final stage of production
  3. On first stage of production
  4. On all stages of production up to the final sale
Correct answer: (D)
On all stages of production up to the final sale
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