Business Economics TYBCOM Sem 6 MCQ PDF With Answers Download

Business Economics TYBCOM Sem 6 MCQ PDF With Answers Download: Business Economics is one of the significant subjects in B.com’s Third Year. And Mcq plays a vital role in scoring good marks in the Business Economics Exam. So we will provide you the PDF containing all the MCQs you need to study for your Business Economics TYBCOM Sem 6 Exam.

This PDF document contains multiple-choice questions with answers related to Business Economics for TYBCom Sem 6. The questions cover topics such as accessible trade areas, customs unions, trade blocs, foreign exchange, international finance, and more.

Business Economics TYBCOM Sem 6 MCQ PDF Download

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Above is the link to the PDF file of the Semester 6 MCQs PDF of T.Y B.com. The PDF contains PCQs from all four chapters of the Semester 4 of TYBCom.You can see the questions in the pdf and the answers to all the questions are given below.

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Business Economics TYBCOM Sem 6 MCQ PDF-Answers (Chapter 1: INTERNATIONAL TRADE)

1. International trade increases the welfare of all participating countries.
2. International trade increases the output of participating countries.
3. According to David Ricardo, international trade is beneficial under comparative cost.
4. David Ricardo’s Theory assumes perfect mobility of labor within and between the participating countries.
5. Comparative cost theory is a static theory because it assumes there is no qualitative and quantitative change in inputs.
6. Ricardian theory measures comparative cost in terms of input costs, money, or man-days.
7. Ricardian theory assumes that labor is homogeneous within the country.
8. Ricardian theory can be extended to more than two countries.
9. Hecksher Ohlin theory on international trade can explain both inter-regional and international trade.
10. Commodity X is capital-intensive when, in its production, the capital/labor ratio is greater than Commodity Y.
11. Hecksher Ohlin theory cannot be applied to several commodities and several countries.
12. According to Hecksher Ohlin theory, product price depends on all of the given factors.
13. According to Hecksher Ohlin theory, international trade takes place due to the difference in product price, labor efficiency, and advanced technology.
14. In international trade, commodities move between nations, and not factors.
15. Terms of trade are expressed as a ratio of the price index of exports and imports.
16. Terms of trade are favorable if the current index in comparison to the base year index is more.
17. Gross barter terms of trade takes into account trade items and unilateral payments.
18. Income terms of trade indicate increased capacity to export.
19. Single factoral terms of trade take into account changes in the efficiency of factors of production of export goods.
20. Generally, developing countries suffer from adverse terms of trade.
21. The gain from trade is maximum if the international terms of trade are nearer to the internal terms of trade of the trading partner.
22. An offer curve differs from usual demand and supply curves.
23. International trade increases the welfare of all participating countries.
24. International trade results in all of the given below, including innovations, reduction in costs, and diversification of consumption.
25. Cultural changes due to international trade can be positive and negative.
26. The concept of gross barter terms of trade was introduced by Frank Taussig.
27. The concept of income terms of trade was introduced by Graeme S Dorrance.
28. The utility terms of trade were introduced by Jacob Viner.
29. The concept of offer curves was introduced by A. Marshall and F Edgeworth.
30. Terms of trade will be favorable to a country when all of the given below, including its exports, have inelastic demand, its imports have elastic demand, and its supply of exports is elastic.
31. The offer curve of a country is based on the relative prices of two commodities.
32. A country will have unfavorable terms of trade when imports have inelastic demand.
33. When the supply of exports is elastic, a country will have favorable terms of trade.
34. The concept of reciprocal demand was introduced by F.W. Taussig.
35. Reciprocal demand is expressed in terms of offer curves.

All the above given are the answers to the questions given in the PDF, please refer to the PDF for the questions.

Business Economics TYBCOM Sem 6 MCQ PDF-Answers (Chapter 2: COMMERCIAL POLICY AND INTERNATIONAL ECONOMIC INTEGRATION)

1. What is not an objective of commercial trade policy? Answer: (b) Commercial trade policy does not aim to determine the rate of interest.
2. What is an argument for free trade? Answer: (d) The promotion of efficient allocation of world resources is an argument for free trade.
3. What is an argument against the policy of free trade? Answer: (b) The protection of inefficient industries is an argument against the policy of free trade.
4. What does protectionist policy help prevent? Answer: (c) Protectionist policy helps prevent dumping.
5. What are tariff rate quotas? Answer: (a) Tariff rate quotas are a combination of tariffs and quotas.
6. What is a compound tariff? Answer: (c) A compound tariff is a tariff expressed as either a specific or an ad valorem rate, whichever is higher.
7. What do countervailing tariffs aim to do? Answer: (c) Countervailing tariffs specifically aim to neutralize the effects of subsidies given to the producers in the exporting countries.
8. What is a system that makes it mandatory for domestic producers to use some proportion of domestic raw material? Answer: (a) A mixing quota is a system that makes it mandatory for domestic producers to use some proportion of domestic raw material.
9. What is not a non-tariff barrier (NTB)? Answer: (d) Tariff rate quotas are not an NTB.
10. What NTB prevents the free movement of capital between countries? Answer: (b) Exchange controls are an NTB that prevents the free movement of capital between countries.
11. What is the result of the reduction in domestic consumption due to the imposition of quotas? Answer: (c) The reduction in domestic consumption due to the imposition of quotas results in a loss of social welfare.
12. What is a preferential trade area? Answer: (b) A preferential trade area is a trade bloc where countries agree to reduce or eliminate tariff barriers on selected goods imported from other member nations.
13. What is a free trade area? Answer: (a) A free trade area is a trade bloc where countries agree to reduce or eliminate tariff barriers on all goods imported from other member nations.
14. What is a customs union? Answer: (c) A customs union is a trade bloc where countries agree to have a common unified tariff against non-members.
15. What is a common or single market? Answer: (d) A common or single market is a trade bloc where all barriers are eliminated to allow the free movement of goods, services, capital, and labor.
16. What is one disadvantage of international economic integration? Answer: (c) Increasing interdependence is one of the disadvantages of international economic integration.
17. What was signed to create the European Union in 1993? Answer: (a) The Treaty of Maastricht was signed to create the European Union in 1993.
18. In what year did the Euro replace the national currencies of 12 EU member nations? Answer: (b) The Euro replaced the national currencies of 12 EU member nations in 2002.
19. What governs the functioning of the EU single market? Answer: (d) The Treaty of the Functioning of the European Union governs the functioning of the EU single market.
20. What kind of crisis was the Eurozone crisis? Answer: (c) The Eurozone crisis was essentially a sovereign debt crisis.
21. When was ASEAN formed? Answer: (a) ASEAN was formed in 1967.
22. What was established in 2015 to bring about economic integration to create a single market in ASEAN? Answer: (a) The ASEAN Trade

Business Economics TYBCOM Sem 6 MCQ PDF-Answers (Chapter 3: BALANCE OF PAYMENTS AND WTO)

1. What are unilateral transfers? Ans: Unilateral transfers refer to unrequited transfers, which are one-way transfers that include gifts and remittances.
2. What do unilateral flows in the balance of payment account refer to? Ans: Unilateral flows in the balance of payment account refer to gifts and grants, which are a type of invisible flow of services.
3. What is the full form of TRIMs? Ans: TRIMs stands for Trade Related Investment Measures.
4. When was the WTO set up? Ans: The WTO was set up on January 1, 1995.
5. What does GATS stand for? Ans: GATS stands for General Agreement on Trade in Services.
6. Are autonomous capital flows related to other items in the balance of payments? Ans: Autonomous capital flows are independent of other items in the balance of payments.
7. What does the current account in the balance of payments include? Ans: The current account in the balance of payments includes merchandise trade and services, but also autonomous and accommodating flows.
8. What factors have contributed to a deficit in India’s Balance of Trade in recent times? Ans: A deficit in India’s Balance of Trade in recent times is due to all of the following: a rise in the price of crude oil, an increase in imports, and a reduction in exports.
9. Which account has helped India to reduce its current account balance deficit in recent times? Ans: Good performance on the invisible account has helped India to reduce its current account balance deficit in recent times.
10. What has increased in India’s capital account in recent times? Ans: Non-debt foreign investment flows have increased on India’s capital account in recent times.
11. What are excess capital account receipts added to after covering deficits on the current account? Ans: After covering deficits on the current account, excess capital account receipts are added to foreign exchange reserves.
12. What does bank capital on India’s capital account include? Ans: Bank capital on India’s capital account includes foreign currency deposits-NRI deposits, foreign exchange reserves, local withdrawal from NRI rupee deposits, and official transfers.
13. What do private transfers on India’s current account include? Ans: Private transfers on India’s current account include local withdrawal from NRI rupee deposits, foreign currency deposits, and foreign exchange reserves.
14. Who benefits from international trade? Ans: International trade increases the welfare of all participating countries.
15. Whose proposals were incorporated in the WTO agreements? Ans: Arthur Dunkel’s proposals were incorporated in the WTO agreements.
16. Which organization has given a mandate to negotiate multilateral rules relating to services? Ans: The WTO has given a mandate to negotiate multilateral rules relating to services.
17. Is foreign direct investment a part of the capital account, trade account, or current account? Ans: Foreign direct investment is a part of the capital account.
18. How is external borrowing treated as a flow? Ans: External borrowing is treated as an autonomous flow.
19. What do foreign exchange reserves of India include? Ans: Foreign exchange reserves of India include all of the following: Special Drawing Rights, foreign currency reserves, and Reserve Tranche of IMF.
20. What is the highest authority of the WTO? Ans: The General Council is the highest authority of the WTO.
21. What is the aim of the Agreement on Agriculture? Ans: The Agreement on Agriculture does not aim at increasing export subsidies.
22. What do intellectual property rights include? Ans: Intellectual property rights include all of the following: copyrights, layout designs, and trademarks.
23. What is not included in the current account balance of BoP? Ans: Foreign direct investment (FDI) is not included in the current account balance of BoP.
24. What is not a part of unilateral transfers? Ans: Short-term loans are not a part of unilateral transfers.

Business Economics TYBCOM Sem 6 MCQ Answers (Chapter 4: FOREIGN EXCHANGE MARKET)

1. Hedging refers to the covering of a foreign exchange risk.
2. Under flexible exchange rate system, exchange rate is determined by the demand and supply of foreign exchange.
3. Functions of forex market include provision of facilities for funds transfer, trading, and short term finance.
4. Import and export of goods and services is not a function of the foreign exchange market.
5. Interest arbitrage helps to equalize the exchange rate in all parts of the foreign exchange market.
6. Forward market in foreign exchange refers to a market for the long run.
7. Speculation in foreign exchange market refers to accepting risk to make profits.
8. India adopts a managed flexibility exchange rate system.
9. The rate at which the foreign currency is exchanged at the current rate is called the spot rate.
10. Vehicle currency is not a standard internationally accepted currency, not a currency of IMF, not a currency issued by RBI.
11. Arbitrage refers to the purchase and sale of an asset at a low price in one market and its simultaneous sale at a higher price in another market.
12. Small investors are not included in the wholesale foreign exchange market.
13. Speculators deal in spot and forward exchange rates.
14. Hedgers enter the foreign exchange market to cover risk.
15. Foreign exchange market is a place where various foreign currencies are exchanged.
16. Flexible exchange rate creates uncertainty in importers and exporters.
17. Stability in the international monetary system is not a defect of the flexible exchange rate.
18. Under the exchange rate system, the exchange rate is determined by market forces.
19. Under the exchange rate system, the central bank of a nation intervenes in exchange rate determination under the managed float system.
20. Under the fixed exchange rate system, the exchange rate was stable.
21. The modern foreign exchange market operates under a floating rate system.
22. In exchange rate determination, the first currency in the currency pair is called the base currency.
23. Operating 24 hours for 5 days in a week is a feature of the foreign exchange market.
24. Limited geographical coverage is not a feature of the foreign exchange market.
25. Leverage enables an investor to earn high returns while minimizing capital risks.
26. Transactions in foreign exchange market have become quicker due to advanced technology.
27. Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a communication network that facilitates 24-hour secure international exchange of payment instructions between banks, central banks, multinational corporations, and major securities firms.
28. The function of foreign exchange market that helps in clearing international transactions is known as transfer.
29. Provision of documentary bills of exchange in international payments is an example of the creation of credit function.
30. The function of foreign exchange market, which is concerned with fixing of forward exchange rates, is known as hedging.
31. The foreign exchange rate of a nation is influenced by speculators, hedgers, and arbitrators.
32. The foreign exchange rate of a nation is influenced by BoP, interest rate, and speculation.
33. Clearing of payment takes place fairly long period is not a feature of spot exchange rate.
34. The demand for foreign currency arises due to imports, exports, and investments from abroad.
35. The supply of foreign currency is on account of exports, imports, and investments abroad.
36. Spot rate is the rate at which a nation’s currency is exchanged.

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