Chapter international-business: International Business Assertion-Reason Questions | business studies Class 11 CBSE

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 1

Logic Check

Assertion (A): International business is broader than international trade. Reason (R): International business includes not only trade in goods and services but also foreign investments, licensing, franchising, and overseas production.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 2

Logic Check

Assertion (A): Countries engage in international business because all countries can produce all goods with equal efficiency. Reason (R): Differences in natural resource endowments and productivity levels create a basis for specialisation and trade.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 3

Logic Check

Assertion (A): A Letter of Credit is the most appropriate and secure method of payment in international transactions. Reason (R): It is a guarantee issued by the importer's bank assuring the exporter that payment will be honoured up to a specified amount.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 4

Logic Check

Assertion (A): International business is less complex than domestic business. Reason (R): International business involves dealing with multiple currencies, different legal systems, and diverse socio-cultural environments.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 5

Logic Check

Assertion (A): A Shipping Bill is submitted to customs authorities to obtain permission for export. Reason (R): The Shipping Bill contains details of goods being exported, the name of the vessel, port of discharge, and exporter's details.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 6

Logic Check

Assertion (A): The IEC number must be obtained by every exporter from DGFT before undertaking exports. Reason (R): The IEC number is required to be filled in various export and import documents and is mandatory for all international trade transactions in India.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 7

Logic Check

Assertion (A): Franchising is more stringent than licensing in international business. Reason (R): Franchisers set strict rules and regulations as to how franchisees should operate their businesses, unlike licensors who give more operational freedom.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 8

Logic Check

Assertion (A): Contract manufacturing involves no investment risk for the international firm in the foreign country. Reason (R): Under contract manufacturing, the international firm uses the existing production facilities of the local manufacturer and makes little or no investment in the foreign country.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 9

Logic Check

Assertion (A): A wholly owned subsidiary is the best mode of international business entry for small and medium-sized firms. Reason (R): Small and medium firms often lack sufficient funds to make the 100% equity investment required to set up a wholly owned subsidiary abroad.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 10

Logic Check

Assertion (A): Trade in services is also known as visible trade. Reason (R): Services such as tourism, banking, and transportation can be seen and touched just like goods.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 11

Logic Check

Assertion (A): A Bill of Lading is a document of title to goods and can be freely transferred by endorsement and delivery. Reason (R): The Bill of Lading is issued by the shipping company after receiving the freight charges, acknowledging receipt of goods for carrying to the port of destination.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 12

Logic Check

Assertion (A): In domestic business, both buyers and sellers belong to the same nation. Reason (R): This makes interaction and finalising business deals relatively easier due to shared language, culture, and business practices.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 13

Logic Check

Assertion (A): Joint ventures allow foreign firms to share the risks and costs of entering unfamiliar markets. Reason (R): In a joint venture, the local partner contributes equity, local market knowledge, and established networks, reducing the financial and informational burden on the foreign firm.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 14

Logic Check

Assertion (A): Pre-shipment inspection is compulsory for all types of export goods in India. Reason (R): The government has exempted star trading houses, export houses, and units in EPZs/SEZs from pre-shipment inspection.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 15

Logic Check

Assertion (A): The Duty Drawback Scheme makes Indian export products more competitive in world markets. Reason (R): By refunding excise duties paid on inputs used in export production, it reduces the cost burden on exporters, allowing them to offer competitive prices.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 16

Logic Check

Assertion (A): In licensing, the licensor must make substantial financial investments in the licensee's country. Reason (R): Under licensing, it is the licensee who sets up and funds the business unit; the licensor needs to make virtually no investments abroad.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 17

Logic Check

Assertion (A): Exchange rate fluctuations create additional challenges for international business firms. Reason (R): Since international transactions involve multiple currencies, changing exchange rates make it difficult to fix stable prices and expose firms to foreign exchange risks.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 18

Logic Check

Assertion (A): A Mate's Receipt is issued by the customs department as proof that goods have been cleared for export. Reason (R): A Mate's Receipt is actually issued by the commanding officer of the ship after cargo has been loaded on board the vessel.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 19

Logic Check

Assertion (A): In international business, factors of production like labour and capital face fewer restrictions in movement across national boundaries compared to movement within a country. Reason (R): Legal restrictions, socio-cultural differences, geographic influences, and economic conditions restrict the movement of factors of production across countries.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 20

Logic Check

Assertion (A): A Certificate of Origin is required only when there is an import ban on goods from certain countries. Reason (R): A Certificate of Origin specifies the country of manufacture and may entitle the importer to claim tariff concessions, and is also required when there is a ban on imports from specific countries.

Reasoning Options

ByteNotes

Chapter sections

Chapter international-business: International Business | Assertion-Reason

Assertion (A): International business is broader than international trade. Reason (R): International business includes not only trade in goods and services but also foreign investments, licensing, franchising, and overseas production.

Assertion (A): Countries engage in international business because all countries can produce all goods with equal efficiency. Reason (R): Differences in natural resource endowments and productivity levels create a basis for specialisation and trade.

Assertion (A): A Letter of Credit is the most appropriate and secure method of payment in international transactions. Reason (R): It is a guarantee issued by the importer's bank assuring the exporter that payment will be honoured up to a specified amount.

Assertion (A): International business is less complex than domestic business. Reason (R): International business involves dealing with multiple currencies, different legal systems, and diverse socio-cultural environments.

Assertion (A): A Shipping Bill is submitted to customs authorities to obtain permission for export. Reason (R): The Shipping Bill contains details of goods being exported, the name of the vessel, port of discharge, and exporter's details.

Assertion (A): The IEC number must be obtained by every exporter from DGFT before undertaking exports. Reason (R): The IEC number is required to be filled in various export and import documents and is mandatory for all international trade transactions in India.

Assertion (A): Franchising is more stringent than licensing in international business. Reason (R): Franchisers set strict rules and regulations as to how franchisees should operate their businesses, unlike licensors who give more operational freedom.

Assertion (A): A wholly owned subsidiary is the best mode of international business entry for small and medium-sized firms. Reason (R): Small and medium firms often lack sufficient funds to make the 100% equity investment required to set up a wholly owned subsidiary abroad.

Assertion (A): Trade in services is also known as visible trade. Reason (R): Services such as tourism, banking, and transportation can be seen and touched just like goods.

Assertion (A): A Bill of Lading is a document of title to goods and can be freely transferred by endorsement and delivery. Reason (R): The Bill of Lading is issued by the shipping company after receiving the freight charges, acknowledging receipt of goods for carrying to the port of destination.

Assertion (A): In domestic business, both buyers and sellers belong to the same nation. Reason (R): This makes interaction and finalising business deals relatively easier due to shared language, culture, and business practices.

Assertion (A): Joint ventures allow foreign firms to share the risks and costs of entering unfamiliar markets. Reason (R): In a joint venture, the local partner contributes equity, local market knowledge, and established networks, reducing the financial and informational burden on the foreign firm.

Assertion (A): Pre-shipment inspection is compulsory for all types of export goods in India. Reason (R): The government has exempted star trading houses, export houses, and units in EPZs/SEZs from pre-shipment inspection.

Assertion (A): The Duty Drawback Scheme makes Indian export products more competitive in world markets. Reason (R): By refunding excise duties paid on inputs used in export production, it reduces the cost burden on exporters, allowing them to offer competitive prices.

Assertion (A): In licensing, the licensor must make substantial financial investments in the licensee's country. Reason (R): Under licensing, it is the licensee who sets up and funds the business unit; the licensor needs to make virtually no investments abroad.

Assertion (A): Exchange rate fluctuations create additional challenges for international business firms. Reason (R): Since international transactions involve multiple currencies, changing exchange rates make it difficult to fix stable prices and expose firms to foreign exchange risks.

Assertion (A): A Mate's Receipt is issued by the customs department as proof that goods have been cleared for export. Reason (R): A Mate's Receipt is actually issued by the commanding officer of the ship after cargo has been loaded on board the vessel.

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