1. What do you understand by globalization?

Globalization refers to the increasing interconnectedness and interdependence of

countries worldwide through the flow of goods, services, capital, technology, and people. It
encompasses economic, social, cultural, and political dimensions, leading to greater
integration and interaction among nations.

2. What is a mixed economy?

A mixed economy combines elements of both capitalism and socialism. It features private
ownership and market mechanisms, but also includes government intervention in areas
such as regulation, social welfare, and public services.

3. What are the types of political risk?

Political risks are events or conditions that can affect a company’s ability to operate
profitably in a foreign country. Types of political risk include:

Transfer risk:

Restrictions on the transfer of capital, payments, or technology.

Operational risk:

Government policies or regulations that directly affect business operations.

Ownership risk:
Government actions that threaten the ownership or control of foreign investments.

4. Define currency convertibility?

Currency convertibility refers to the ability to exchange one currency for another freely
without restrictions. It is essential for international trade and investment, allowing
businesses and individuals to convert their earnings or investments into their home
currency.

5. What is technology transfer?

Technology transfer is the process of disseminating technological knowledge, skills, or

equipment from one entity to another. It can occur through various channels, such as
licensing agreements, joint ventures, foreign direct investment, and training programs.

6. What is the meaning of MNCs?

MNC stands for Multinational Corporation. It is a company that operates in multiple

countries, with its headquarters typically located in one country and subsidiaries or
branches in others.

7. What is Foreign Portfolio Investment?

Foreign Portfolio Investment (FPI) refers to investments made by non-residents in the

financial assets of a country, such as stocks and bonds. FPI does not involve the
management or control of the invested company.

8. What is international business?

International business encompasses all commercial activities that cross national borders.
It includes trade in goods and services, foreign direct investment, licensing, franchising,
and other forms of international cooperation.

9. What is Global warming?

Global warming is the long-term increase in Earth’s average surface temperature due to the
buildup of greenhouse gases in the atmosphere, primarily caused by human activities such
as burning fossil fuels.

10. What is the world’s currency?

There isn’t a single “world currency.” The US dollar is often used as the reserve currency
and for international transactions, but each country typically has its own currency.

11. What is the difference between World Bank and IMF?

• World Bank: Focuses on long-term economic development and poverty reduction,

primarily through loans and grants for infrastructure and social projects.

• IMF (International Monetary Fund): Focuses on maintaining stability in the international

monetary system, providing financial assistance to countries facing balance of payments
problems.

12. What do you mean by trade?

Trade refers to the exchange of goods and services between individuals, businesses, or
countries. It can be domestic or international, and it is a fundamental driver of economic
activity.
 13. What is Mercantilism?

Mercantilism was an economic theory prevalent in Europe during the 16 th to 18th centuries.
It emphasized the accumulation of wealth, particularly gold and silver, through a favorable
balance of trade, with exports exceeding imports.

14. What is Foreign Investment?

Foreign Investment is the investment of capital by residents of one country into business
ventures in another country. It can take the form of foreign direct investment (FDI) or foreign
portfolio investment (FPI).

15. What is meant by Foreign exchange Rate?

The foreign exchange rate is the price of one currency expressed in terms of another
currency. It determines the value at which one currency can be exchanged for another in
the foreign exchange market.

16. What is a non-tariff trade barrier?

Non-tariff trade barriers are restrictions on international trade that do not involve tariffs
(taxes on imports). They can include quotas, import licenses, product standards, and other
regulations.

17. Define the WTO?

The WTO (World Trade Organization) is an international organization that regulates

international trade. It aims to reduce trade barriers and promote free and fair trade among
its member countries.
 18. What is the World Bank?

The World Bank is an international financial institution that provides loans and grants to
developing countries for development projects.

19. What is FDI?

FDI stands for Foreign Direct Investment. It is an investment made by a company or

individual in one country into a business interest in another country, with the intent of
establishing a lasting interest.

20. What do you mean by capitalism?

Capitalism is an economic system characterized by private ownership of the means of

production, free markets, and competition.

21. What are trade blocks?

Trade blocs are agreements between countries to reduce or eliminate trade barriers among
themselves, while often maintaining barriers with countries outside the bloc. Examples
include NAFTA and the European Union.

22. What’s conflict?

Conflict in an international business context can refer to disputes or disagreements

between companies, countries, or other stakeholders. It can arise from various sources,
such as trade disputes, political tensions, or cultural differences.
 23. Expand WTO and MIGA and explain?

• WTO (World Trade Organization): An international organization that regulates

international trade.

• MIGA (Multilateral Investment Guarantee Agency): Part of the World Bank Group, MIGA
promotes foreign direct investment in developing countries by providing political risk
insurance.

24. What is IMF?

IMF stands for International Monetary Fund. It is an international organization that

promotes international monetary cooperation, exchange rate stability, and financial
assistance.

25. What is Uniform law?

Uniform law refers to a set of laws that are standardized and adopted by multiple
jurisdictions, aiming to harmonize legal rules and regulations across different regions or
countries.

26. What causes foreign currency to fluctuate?

Foreign currency fluctuations are influenced by various factors, including:

Economic factors:

Interest rates, inflation, economic growth.

Political factors:

Political stability, government policies.

Market sentiment:

Investor confidence, speculation.

Supply and demand:

Demand for a currency and its availability.

27. What is the role of MNCs?

MNCs play a significant role in the global economy, contributing to:

Foreign direct investment:

Creating jobs and stimulating economic growth in host countries.

Technology transfer:

Bringing new technologies and skills to developing countries.

Trade:
Facilitating international trade and supply chains.

Competition:

Increasing competition and innovation in markets.

28. Why is the MIC important?

It’s possible that MIC is a typo and meant to be MNC. If so, MNCs (Multinational
Corporations) are important because they drive globalization, foster economic growth,
facilitate technology transfer, and promote international trade.

29. What is Indian foreign trade policy?

Indian foreign trade policy outlines the government’s strategies and measures to promote
exports, regulate imports, and facilitate international trade. It aims to enhance India’s
competitiveness in the global market.

30. State the main Services of World Bank?

The World Bank provides various services, including:

Financial assistance:

Loans, grants, and credits to developing countries.

Technical assistance:

Expertise and advice on development issues.

Research and analysis:

Studies and reports on economic and social development.

31. What are the factors that determine the foreign exchange?

Factors that determine foreign exchange rates include:

Interest rates:

Higher interest rates attract foreign investment, increasing demand for the currency.

Inflation:

Higher inflation reduces a currency’s value.

Economic growth:

Strong economic growth attracts investment, increasing demand for the currency.

Political stability:
Political stability attracts investment, increasing demand for the currency.

Market sentiment:

Investor confidence and speculation can influence currency values.

Supply and demand:

Demand for a currency and its availability affect its price.

32. Give the meaning of Absolute cost Advantage?

Absolute cost advantage exists when a country can produce a good or service at a lower
cost than another country, using the same amount of resources.

33. What do you mean by tariffs?

Tariffs are taxes imposed on imported goods or services. They increase the price of
imports, making them less competitive with domestic products.

34. Expand BRICS?

BRICS is an acronym for the group of five major emerging economies: Brazil, Russia, India,
China, and South Africa.

35. Write the opportunity Cost Theory?

The opportunity cost theory states that the cost of producing one good or service is the
value of the next best alternative that must be forgone. In international trade, it suggests
that countries should specialize in producing goods and services for which they have a
lower opportunity cost.

36. What is Euro Dollar Market?

The Eurodollar market is a market for US dollars held in banks outside the United States. It
facilitates international borrowing and lending of US dollars.

37. What is the optimum tax?

The optimum tax is the tax rate that maximizes social welfare, considering both the benefits
of government revenue and the costs of taxation.

38. What is TRIPS and TRIMS?

• TRIPS (Trade-Related Aspects of Intellectual Property Rights): An international agreement

that sets minimum standards for the protection of intellectual property rights.

39. What is the trade theory?

The aim of Trade Theory is to explain the existing patterns of trade, the impact on the
domestic economy, and the type of public policies that should be introduced to
increase a country’s well-being.

40. What do you mean by comparative advantage ?

In economics, a comparative advantage means an entity (like a country, company, or

individual) can produce a good or service at a lower opportunity cost than another entity.
This implies they are relatively more efficient in producing that specific good or service
compared to other goods or services they could produce.