Global Business Environment MCQs
Globalization – refers to the growing interdependence of countries worldwide through increased trade, increased capital flows and the rapid diffusion of technology. Here on MCQs.club we have prepared Multiple-Choice Questions (MCQs) on Global Business Environment that fully cover MCQs on the global business environment and the cultural environment of international business including technological environment, the changing environment. These MCQs also cover the meaning and types of global business environment. Our prepared MCQs are useful for Competitive exams, Business management exams and Professional accountancy exams.
- A country’s government has a major role to play in the success or failure of its economy. Governments can influence:
- The macroeconomic environment
- Legal and market regulation
- Corporate governance and social responsibility
- All of the above
- The macroeconomic environment is concerned with factors in the overall economy, for example interest rates, exchange rates and levels of demand and supply. Whereas, Microeconomics is concerned with economic circumstances of individual industries or companies.
- True
- False
- A government will usually have main objectives for its macroeconomic policy including:
- Economic growth, Controlled inflation
- Employment, A controlled balance of trade and exchange rate
- Both A&B
- None
- Governments seek low, stable inflation for a number of reasons including:
- Stable inflation creates certainty – the ideal condition for business investment.
- Low inflation levels are fairer to those on low or fixed incomes.
- Both A&B
- None
- Governments are keen to increase the overall level of employment for a number of reasons including:
- A number of societal problems, such as crime, poor health and the breakdown of family units are linked to unemployment.
- Large numbers of employment people can stifle economic growth because being on a low income means an individual can afford to spend less and therefore demand within the economy falls.
- Both A&B
- None
- National account balances – measure the production, income and expenditure levels within an economy. The balance of trade forms part of the current account of a nation’s national account balances.
- The above is correct
- The above is incorrect
- The elements of National accounts are:
- Current account
- Capital account
- Financial account
- Balance sheet
- All of the above
- Current account – This is made up of:
- Production accounts
- Income accounts
- Expenditure accounts
- All of the above
- The impacts of a rise in interest rates include:
- Spending falls, Investment falls
- Foreign funds are attracted into the country
- Both A&B
- None
- Market Regulation could involve regulating:
- demand, supply, price, profit
- quantity, quality, entry, exit
- information, technology, or any other aspect of production and consumption
- All of the above
- The costs of regulation include:
- Enforcement costs
- Regulatory capture
- Unintended consequences of regulation
- All of the above
- Deregulation – can be defined as the removal or weakening of any form of statutory (or voluntary) regulation of free market activity. Deregulation allows free market forces more scope to determine the outcome.
- The above definition is correct
- The above definition is incorrect
- Deregulation measures are also known as:
- Black listed
- Derecognition
- Liberalization
- None
- The possible benefits of deregulation include:
- Increased incentive to find internal cost savings and efficiency
- Improved allocative efficiency
- Both A&B
- None
- Liberalization could have certain disadvantages including:
- Loss of economies of scale
- Lower quality or quantity of service
- Need to protect competition
- All of the above
- Corporate governance –
- is the system by which companies and other entities are directed and controlled.
- concerns shareholders (the owners) and directors (the management), as between them they direct and control the company.
- Both A&B
- None
- Stakeholders –
- are persons or groups that have a legitimate interest in a business’s conduct and whose concerns should be addressed as a matter of principle
- are those persons and organisations that have an interest in the strategy of an organisation.
- Both A&B
- None
- Types, or constituencies, of stakeholder in an organization are:
- Internal stakeholders such as employees and management
- Connected stakeholders such as shareholders, customers, suppliers and financiers
- External stakeholders such as the community, government, trade unions and pressure groups
- All of the above
- Examples of conflicting interests between stakeholder groups include:
- Shareholders demanding rising profits and customers wanting higher quality (more costly) products
- Employee demand for pay rises against the need for management to maximise profit
- The community wanting minimal environmental impact from the organisation but shareholders want the least costly option for disposing of waste chosen
- All of the above
- Internal stakeholder groups are likely to have both more influence and more interest than external groups. Coalitions of stakeholder groups are likely to have more influence than single stakeholders or small uniform groups.
- True
- False
- The US Sarbanes-Oxley Act 2002 (SOX) takes a different, rules-based approach, to corporate governance. The objective is to prevent creative accounting. Examples of some SOX rules include:
- Restrictions on non-audit services provided by auditors
- Report on internal control systems to form part of the financial statements
- Both A&B
- None
- Corporate social responsibility (CSR) refers to the expectation in society that companies are accountable for the social and ethical effects of their actions. If they fail in their duty to the public then compensation may be sought from them.
- True
- False
- Advantages of Corporate social responsibility (CSR) strategies include:
- Creates new markets for goods and services and attracts new, likeminded customers
- Positive impact on profitability if sales increase and costs fall
- Attractive to likeminded, high quality employees
- All of the above
- Developing economies face different challenges to corporate social responsibility than developed nations. Key drivers for CSR in developing economies include:
- Socio-economic priorities
- Governance gaps
- Both A&B
- None
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