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Globalisation MCQs

Globalisation is the term used to describe the way countries are becoming more interconnected both economically and culturally. Globalisation is an international process driven by trade and investment technology and finance. This process has effects on the environment on culture, political systems, economic development, and human physical well-being in societies around the world.

Globalisation MCQs: This section contains multiple-choice questions and answers on Globalisation. It will help the students to prepare well for their exams and to test their skills in Globalisation.

List of Globalisation MCQs

1. The process of rapid integration or interconnection between countries due to greater foreign investment is known as:

  1. Integration of markets
  2. International Trade
  3. MNC
  4. Globalisation

Answer: D) Globalisation


The process of rapid integration or interconnection between countries due to greater foreign investment is known as Globalisation. It connects the country with other world economies through trade, revenue, and technology.

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2. A company that owns or controls production in more than one nation is called?

  1. Foreign Company
  2. Multinational Company
  3. International Company
  4. Local Company

Answer: B) Multinational Company


The MNC represents the Multinational Corporation with assets in at least one country other than its own country. Such companies have offices or factories in different countries and will have a world headquarters office.

Setting the main condition of the MNC is the availability of cheap labour resources.

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3. When did the Indian Government introduce a policy of Liberalisation known as 'New Economic Policy'?

  1. 1980
  2. 2000
  3. 1994
  4. 1991

Answer: D) 1991


Former Prime Minister Manmohan Singh is regarded as the father of India's New Economic Policy (NEP). Manmohan Singh introduced the NEP on July 24, 1991.

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4. Why did the government decide to remove barriers to foreign trade and foreign competition?

  1. Because the government wanted to earn foreign exchange.
  2. Because the government wanted to maintain good relations with countries.
  3. Because the government felt that the time had come for Indian producers to compete in the world market.
  4. None of these

Answer: C) Because the government felt that the time had come for Indian producers to compete in the world market


In New Economic Policy in 1991, the government decided to remove barriers because it felt that Indian producers were ready to compete in the world market. This decision was also supported by powerful international organisations.

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5. Which sector has not benefited from the policy of globalisation?

  1. Agricultural Sector
  2. Manufacturing Sector
  3. Service Sector
  4. All of the above

Answer: A) Agricultural Sector


Under the provisions of GATT (General Agreement for Tariff and Trade), India has not been able to open its agricultural sector to export. India's exports were heavily restricted to traditional products such as spices, tea, coffee etc., which had a very low demand for expansion in the international market.

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6. Globalisation results in:

  1. lesser competition among producers
  2. greater competition among producers
  3. no change in competition among producers
  4. none of the above

Answer: B) greater competition among producers


Globalisation results in greater competition among producers and also gives businesses a competitive advantage by allowing them to acquire raw materials where they are less expensive. Globalisation allows organizations to exploit lower labour costs in developing countries while utilizing state-of-the-art technology and knowledge of highly developed economies.

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7. Benefits enjoyed by companies who set up production units in the SEZs are:

  1. they do not have to pay taxes for five years
  2. reduction in excise duty
  3. reduced tariffs and barriers
  4. none of the above

Answer: A) they do not have to pay taxes for five years


SEZs were introduced in 2000 in India. Currently, in addition to tax exemptions, industries established in the SEZs enjoy financial benefits that include the import and export of goods, exemptions from goods and services, and taxes imposed by provincial governments.

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8. Which one of the following is not true regarding the impact of the globalisation of India?

  1. It has created jobs in the service sector.
  2. People with education, skill, and wealth have not been benefited.
  3. Benefits of globalisations are not equal.
  4. Labour laws are not implemented properly and workers are denied their rights.

Answer: B) People with education, skill, and wealth have not been benefited


Globalization is a process of cooperation and integration between individuals, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Under global trade, countries have so far shut down trade and investment in other countries opening up their economies and traveling globally. The result is increased communication and integration of global economies. Under global trade more goods and services are increasing, investment and technology are moving between countries. In addition to goods, services, investments, and technology, there is the movement of people from one country to another in search of a better salary, better jobs, or better education.

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9. Which one of the following is a major benefit of a joint production between a local company and a Multi-National Company?

  1. MNC can bring the latest technology in the production
  2. MNC can control the increase in the price
  3. MNC can buy the local company
  4. MNC can sell the products under their brand name

Answer: B) MNC can control the increase in the price


MNC can provide money for the latest technology, like buying new machinery for the fastest production.

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10. The most common route for investments by MNC's in countries around the world is to:

  1. set up new factories
  2. buy existing local companies
  3. form partnerships with local companies
  4. none of these

Answer: B) buy existing local companies


The common route for investments by MNC's in counties around the world is to buy some local companies and expand their production.

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