12 Lecture - Foreign Trade and Foreign Business

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12 Lecture

MGT211

Midterm & Final Term Short Notes

Foreign Trade and Foreign Business

Foreign trade refers to the exchange of goods and services between countries. It is also commonly referred to as international trade. Foreign business, on the other hand, refers to the operations and activities of businesses that operate in coun


Important Mcq's
Midterm & Finalterm Prepration
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  1. Which of the following refers to the exchange of goods and services between countries? a) Domestic trade b) International trade c) Local trade d) Regional trade Answer: b) International trade

  2. What is the primary objective of foreign trade? a) To increase domestic production b) To reduce imports c) To earn foreign exchange d) To decrease the balance of trade Answer: c) To earn foreign exchange

  3. Which of the following is not a mode of foreign trade? a) Export b) Import c) Franchising d) Licensing Answer: c) Franchising

  4. What is the name given to the difference between a country's total exports and imports? a) Balance of payments b) Balance of trade c) Current account d) Capital account Answer: b) Balance of trade

  5. Which of the following is not a benefit of foreign trade? a) Increased competition b) Access to new markets c) Economic growth d) Reduced job opportunities Answer: d) Reduced job opportunities

  6. What is foreign direct investment (FDI)? a) Investment in domestic companies b) Investment in foreign companies c) Investment in domestic and foreign companies d) Investment in government securities Answer: b) Investment in foreign companies

  7. Which of the following is a form of trade protectionism? a) Import quotas b) Export promotion c) Free trade agreements d) Customs unions Answer: a) Import quotas

  8. Which of the following is an example of a trade surplus? a) A country exports more than it imports b) A country imports more than it exports c) A country has no exports or imports d) A country has a balance of trade of zero Answer: a) A country exports more than it imports

  9. What is meant by the term "tariff"? a) A tax on imports b) A tax on exports c) A subsidy for exports d) A subsidy for imports Answer: a) A tax on imports

  10. Which of the following is an example of foreign business? a) A domestic company exporting goods to foreign countries b) A foreign company operating in the domestic market c) A domestic company trading with other domestic companies d) A foreign company importing goods from domestic companies Answer: b) A foreign company operating in the domestic market



Subjective Short Notes
Midterm & Finalterm Prepration
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  1. What is foreign trade and why is it important for the global economy? Answer: Foreign trade refers to the exchange of goods and services between countries. It is important for the global economy because it provides opportunities for businesses to expand their markets, increase profits, and access new technologies and resources.

  2. What are the different modes of foreign trade? Answer: The different modes of foreign trade include exporting, importing, licensing, franchising, and foreign direct investment (FDI).

  3. What are the benefits of foreign trade? Answer: The benefits of foreign trade include increased competition, access to new markets, economic growth, job creation, and technological advancements.

  4. What is meant by the term "balance of trade"? Answer: The balance of trade refers to the difference between a country's total exports and imports.

  5. What is a trade deficit? Answer: A trade deficit occurs when a country imports more than it exports.

  6. What is meant by the term "trade protectionism"? Answer: Trade protectionism refers to the use of policies such as tariffs and import quotas to restrict imports and protect domestic industries.

  7. What is foreign direct investment (FDI)? Answer: Foreign direct investment (FDI) refers to the investment in foreign companies, either through the acquisition of a foreign company or the establishment of a new foreign subsidiary.

  8. What are the benefits and risks associated with foreign direct investment (FDI)? Answer: The benefits of FDI include access to new markets, increased profits, and access to new technologies and resources. The risks include political instability, economic uncertainty, and cultural differences.

  9. What is meant by the term "foreign business"? Answer: Foreign business refers to the operations and activities of businesses that operate in countries other than their home country.

  10. What are the challenges and opportunities associated with foreign business? Answer: The challenges of foreign business include cultural differences, legal and regulatory issues, and political instability. The opportunities include access to new markets, increased profits, and access to new technologies and resources.

Foreign trade and foreign business refer to the activities of businesses that operate in countries other than their home country. It is a critical aspect of the global economy, providing opportunities for businesses to expand their markets, increase profits, and access new technologies and resources. Foreign trade can take many forms, including exporting, importing, licensing, franchising, and foreign direct investment (FDI). Each of these modes of trade presents unique opportunities and challenges for businesses. One of the key benefits of foreign trade is increased competition. When businesses have access to new markets, they are forced to compete with other businesses from around the world, which can drive innovation and improve product quality. Another benefit of foreign trade is economic growth. By expanding their markets, businesses can increase their profits, which in turn can lead to job creation and increased tax revenues for governments. However, foreign trade also presents some challenges. One of the biggest challenges is the potential for a trade deficit, which occurs when a country imports more than it exports. Trade protectionism, such as the use of tariffs and import quotas, is often used to address this issue, but it can also lead to trade wars and other negative consequences. Foreign direct investment (FDI) is another mode of foreign trade that involves the investment in foreign companies, either through the acquisition of a foreign company or the establishment of a new foreign subsidiary. While FDI presents many opportunities for businesses, it also comes with risks, including political instability, economic uncertainty, and cultural differences. Foreign business refers to the operations and activities of businesses that operate in countries other than their home country. This presents many challenges, including cultural differences, legal and regulatory issues, and political instability. However, foreign business also presents many opportunities, including access to new markets, increased profits, and access to new technologies and resources. In conclusion, foreign trade and foreign business are critical components of the global economy, providing opportunities for businesses to expand their markets and increase profits. However, these opportunities come with challenges, and businesses must be prepared to navigate the complexities of operating in foreign markets to succeed.

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