Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 27 Facilitators of International Business Text Book Back Questions and Answers, Notes.
Tamilnadu Samacheer Kalvi 11th Commerce Solutions Chapter 27 Facilitators of International Business
11th Commerce Guide Facilitators of International Business Text Book Back Questions and Answers
I. Choose the Correct Answer
Question 1.
General Agreement on Tariff and Trade was signed on …………………….
a. 30-October-1947
b.29-October-1947
c. 28-October-1947
d. 26-October-1947
Answer:
a. 30-October-1947
Question 2.
WTO was established on ……………………
a. 1-1-1996
b.1-1-1997
c. 1-1-1995
d.1-1-1994
Answer:
c. 1-1-1995
Question 3.
The headquarter of WTO is located at ………………..
a. New York
b.London
c. Geneva
d.Brazil
Answer:
c. Geneva
Question 4.
The day to day administration of WTO is entrusted with
a. Executive Council
b. General Council
c. Administrative Council
d. General Body
Answer:
b. General Council
Question 5.
World bank is located at …………………
a. Washington DC
b. New York
c. Tokyo
d. Hongkong
Answer:
a. Washington DC
II. Very Short Answer Questions
Question 1.
What is WTO?
Answer:
The World Trade Organisation (WTO) was established on 1st January 1995. The GATT was renamed as WTO with some changes.
Question 2.
What do you mean by World Bank?
Answer:
International Bank for Reconstruction and Development is commonly known as World Bank. It was set up in 1944 in order to reconstruct and rehabilitate the first world war-affected countries of Europe and assist in the development of developing countries. It is located in Washington DC. It has offices all over the world.
Question 3.
What are Special Drawing Rights?
Answer:
Special Drawing Rights (SDR) was created by the IMF in the year 1969 as a supplementary international reserve asset. It is described as paper gold.
Question 4.
What is SAARC?
Answer:
South Asian Association for Regional Cooperation is the regional inter-governmental organization and geopolitical union of nations in South Asia. The member countries include Afghanistan, Bangladesh, Bhutan, India, Nepal, Sri lanka, Pakistan and Maldives. It was established on 8th December 1985. It was founded at Dhaka in Bangladesh.
Question 5.
What is GATT?
Answer:
The General Agreement on Tariffs and Trade. (GATT) was signed at Geneva on 30th October 1947 by 23 countries. It came into effect on 1st January 1948.
III. Short Answer Questions
Question 1.
What is the primary motive for the establishment of WTO?
Answer:
The primary motive of WTO is to ensure global trade commences smoothly, freely and predictably. It concentrates on governing trade, settling trade disputes among countries, stimulating economic growth, and creating overall peace and stability in economic transactions.
Question 2.
Name the affiliate of World Bank:
Answer:
- International Development Association (IDA)
- International Financial Corporation (IFC)
- Multinational Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
Question 3.
What are the criticisms of the World Bank?
Answer:
The main critics of the world bank is the conditionality imposed in the borrower countries.
- It fails to resolve the economic problems of the countries
- The undemocratic governance structure, which is dominated by industrialized countries affects the working nature of the world bank.
Question 4.
How is the value of SDR determined currently?
Answer:
From 1st October 2016 SDR basket consists of the US dollar, Euro, the Chinese Renminbi, Japanese Yen, and British Pound sterling. The value of SDR is regularly posted daily in the IMF website. IMF members can exchange SDR for freely usable currencies by voluntary exchange or as per IMF instructions. Besides members can borrow from IMF at a favorable rate of interest to correct the imbalance in the balance of payments.
Question 5.
Mention the functions of SAARC.
Answer:
Functions of SAARC are highlighted
- Monitoring and coordinating the development programme
- Determining inter-sectorial priorities
- Mobilizing cooperation within and outside the region.
- Dealing with modalities of financing
IV. Long Answer Questions.
Question 1.
Point out the objectives of WTO:
Answer:
- Improving the standard of living of people in member countries
- Making optimum utilization of the world’s resources for sustainable development of member countries.
- Promoting an integrated more viable and durable trading system in the sphere of international business
- Expansion of trade in goods and services.
- Ensuring full employment and large steady growth volume of real income and effective demand.
- Protecting the environment.
Question 2.
Write down the functions of WTO.
Answer:
Meaning:
The World Trade Organisation (WTO) was established on 1st January 1995. The GATT was renamed as WTO with some changes. WTO has 164 member countries as on 29th July 2016. The ministerial conference consisting of the representatives of all the member countries is the highest decision-making authority of WTO.
WTO performs the following functions
- It is a forum for negotiation and formalization of a trade agreement among the member countries.
- It settles disputes and grievances relating to trade among the member countries.
- It frames a commonly acceptable code of conduct in order to reduce trade barriers.
- It holds consultations with IMF and World Bank(IBRD) and its affiliates to bring about a greater understanding and co-operation in global economic policymaking.
- It supervises the operations of the agreement relating to the General Agreement on Tariffs and Trade (GATT) and Trade-Related Intellectual Properties Rights (TRIPS)
- It regulates trade between participating countries.
Question 3.
Describe the benefits of WTO:
Answer:
- WTO is promoting international peace and creating a conducive environment for conducting international trade.
- It settles the trade disputes amicably among the member countries.
- It promotes the standard of living of people by increasing their income level from free trades.
- WTO has removed quantitative restrictions and non – tariff barriers. It has facilitated free flow of foreign trade among the member countries. The countries can impose import restrictions only to correct balance of payments difficulties and not otherwise.
- It stimulates economic growth of developing countries by providing them with much needed capital and giving them preferential treatment in trade-related matters.
- WTO organizes periodical regional and international conference. Thus developing countries get opportunity to learn the technicalities, rules and regulations governing world, trade, technical assistance available globally, trade potentials in member countries and so on.
- WTO gives people across the world a wider choice of goods and broader range of qualities of goods to choose from by promoting free trade among the member countries.
- WTO has lowered trade barriers and thereby allowed trade to flourish across the world. The increase in trade contributes to increase in national income and personal income of people
- WTO provides a platform for member countries to establish trade links with one another. In the absence of WTO member countries may have to enter many multilateral agreement with so many countries across the world. It provides a greater access to all nations under one roof.
- WTO is committed to protecting free trade. It has framed rules on subsidies and dumping.
Question 4.
Highlights the functions of IBRD :
Answer:
Meaning:
International Bank for Reconstruction and Development is commonly known as World Bank. It was set up in 1944 in order to reconstruct and rehabilitate first world war-affected countries of Europe and assist in the development of developing countries. It is located at Washington DC. It has its offices all over the world.
Functions Of IBRD The main functions of the world bank are stated below
- Assisting reconstruction of war-affected countries
- Promoting economic growth and balanced growth of the international business
- Promoting infrastructural facilities like energy and transportation, road development, etc. in member countries.
- Encouraging agricultural and industrial development in developing countries by providing adequate resources
- Providing resources for promoting sanitation, education, health care, and small scale enterprises in member countries
- Improving the standard of living of people of member countries by providing assistance by removing poverty, raising productivity, providing technical support, and conducting research and development
Question 5.
Write down the functions of IMF Meaning:
Answer:
- It acts as short term credit institution at the international level.
- It provides machinery for ordinary adjustments of exchange rates.
- It has a reservoir of currencies of the member countries from which a borrower can borrow currencies of other nations.
- It promotes economic stability and global growth by encouraging countries to adopt sound economic and financial policies.
- It offers technical assistance and training to help member countries strengthen and implement effective policies. Technical assistance is offered in formulating banking, fiscal, monetary, and exchange policies.
- It helps member countries correct their imbalance in the balance of payment.
Question 6.
Explain how far India has benefited from IMF
Answer:
Free Convertibility of Indian Rupee Indian rupee has become independent after the establishment of IMF. Earlier it was linked with the pound sterling. Its value is now determined in terms of Gold. Hence it is freely convertible.
Loan For Development Activities:
India got several loan facilities from IMF for its several development projects
Ability To Purchase Foreign Currency:
The government of India is able to purchase foreign currencies from time to time to meet the ever-growing requirement of development activities.
Expert Advice:
India used to get expert advice from IMF for solving the economic problems. It has given valuable advice to India with regard to financing -its 5-year plan.
Timely Help:
India has received timely help from IMF many a time to eliminate the deficit in its balance of payments. India got help from IMF during 1966 in the aftermath of the war with Pakistan. It received assistance from IMF for combating oil shock. Between 1980 and 1983 India got assistance from IMF to manage the global economic recession.
Financial Assistance during Natural Calamity:
India has got a lot of financial assistance from IMF to solve the economic crises arising from natural calamities like floods, famine, earthquakes, aggressions of Chinese and Pakistan, etc. It gets technical assistance fro/n IMF.
Membership in World Bank:
By virtue of its membership in IMF India could become a member of the World Bank.
Help during 1991 Economic Crisis:
During 1990, India faced a serious economic j crisis. Indian Government was almost nearing bankruptcy. It got assistance from IMF by pledging its gold reserve with it to solve its balance of payments crisis.
11th Commerce Guide Facilitators of International Business Additional Important Questions and Answers
I. Choose the Correct Answer
Question 1.
The main function of the World Trade Organisation (WTO) is ……………….
a. Enforcing of Uruguay Round agreements
b. Administering trade dispute settlement procedures
c. Facilitating multi-lateral trade relations of member countries and reviewing trade policies.
d. None of the above
Answer:
c. Facilitating multi-lateral trade relations of member countries and reviewing trade policies.
Question 2.
Which Indian City has been chosen by the World Bank for setting up its back-office operations?
a.Bangalore
b.Chennai
c.Kolkata
d. New Delhi
Answer:
b.Chennai
Question 3.
Regarding the International Monetary Fund, which one of the following statements is correct?
a. It can grant loans to any country
b. It can grant loans to only developed countries
c. It grants loans to only member countries
d. It can grant loans to the central bank of a country
Answer:
d. It can grant loans to the central bank of a country
Question 4.
The headquarters of IMF and World Bank are located at ………………
a. Geneva & Montreal
b. Geneva & Vienna
c. New York & Geneva
d. Washington
Answer:
d. Washington
Question 5.
Special Drawing Rights (SDR) facility is available at …………….
a. World Bank (IBRD)
b. International Monetary Fund (IMF)
c. International Development Association (IDA)
d. Organisation of Economic Cooperation and Development
Answer:
b. International Monetary Fund (IMF)
Question 6.
SAARC was established on ………………
a.1985
b. 1895
c. 1858
d. 1958
Answer:
a.1985
Question 7.
International Centre for Settlement of Investment Disputes was set up in the year ………..
a. 1956
b. 1986
c. 1966
d. 1933
Answer:
c. 1966
Question 8.
The headquarters of International Finance Corporation was situated in ……………..
a. Europe
b.Washington
c.Chennai
d.Florida
Answer:
b.Washington
Question 9.
The number of countries as members in IFC are ……………
a. 164
b.148
c.185
d. 184
Answer:
d. 184
Question 10.
SAARC has been established for promoting the welfare of people of …………………
a. America
b. Africa
c. Asia
d. Europe
Answer:
c. Asia
II. Very Short Answer Questions:
Question 1.
Write the meaning Agreement of Agriculture: (AOA)
Answer:
This agreement was made to ensure free and fair trade in agriculture. This agreement made the developed countries reduce customs duties on their imports and subsidies on the export of agricultural products. But developing countries were exempted from making reciprocal offers keeping in view of the high dependence of these countries on agriculture.
Question 2.
What is IFC?
Answer:
International Financial Corporation (IFC) is an international financial institution that offers advisory services to build up the private sector in developing countries. It is headquartered at Washington DC. It was established in the year 1956. There are 184 countries on the membership list.
It aims at lifting the standard of people of developing and least developed countries by removing poverty, improving education and healthcare, investing in infrastructure development and sustainable agricultural opportunities therein.
III. Short Answer Questions:
Question 1.
Explain TRIPS.
Answer:
This agreement sets out seven minimum standards of protection to be accepted by parties in respect of seven intellectual properties namely, copyright, trademark, geographical indication, industrial design, patent, layout design of integrated circuits, and undisclosed information.
Question 2.
Write a short note on MIGA:
Answer:
This is one of the International Financial Institutions offering political risk insurance and credit enhancement guarantees. The guarantee provided by this institution protects foreign direct investments against the political and non-commercial risks in developing countries. It is headquartered in Washington. It promotes the flow of foreign direct investment (FDI) into developing countries.
Question 3.
What are the objectives of IMF?
Answer:
- Promoting international monetary cooperation
- Ensuring balanced international trade
- Ensuring exchange rate stability
IV. Long Answer Questions:
Question 1.
Write any five criticisms on WTO:
Answer:
The following are the criticisms on World Trade Organisation:
Free Trade Benefits:
Developed Countries more than Developing Countries need some sort of trade protection to develop their new industries. Many developed countries had once used this protection to nurture their infant industries in their development stage. In this context prevention of developing countries from defending their infant industries altogether through restriction is unfair. It is suspected to be a conspiracy to indirectly favor MNC’s.
Most Favoured Nation Principles:
This is the core of WTO rules. Under this rule member countries are advised not to discriminate among the home enterprises, multi-nationals and foreign enterprises. In other words WTO prevents developing countries from favouring their emerging companies. This move is supposed to give unfair advantage to multinational companies.
Failure to Reduce Tariffs on Agriculture:
WTO failed to convince the USA and European Unions to eliminate the high tariffs on agriculture. In other words, it defends high tariff on agriculture in USA and EU. This would undoubtedly hurt the farmers in developing countries.
Neglect of Farmers Interest in Developing Countries:
Developing Countries specialize in producing primary products, i.e. agricultural products. They need some sort of protection to diversify into other sectors of the economy at least in the short term. Many developed nations used this tariff protection in the process of their development. In this context, WTO is criticized for being unfair and neglecting the interest of farmers in developing countries.
Neglect Environmental Considerations:
WTO encourages imports from certain countries that produce the product on a larger scale at the cost of the environment. WTO pushes for achieving an increase in GDP without any regard for the environment. In the current environment of global warming and ever-increasing environmental disaster, utmost priority given by WTO on maximizing GDP at the cost of the environment is misplaced.
Question 2.
Explain the objectives of SAARC:
Answer:
The following are the main objectives of SAARC:
- Promoting the welfare of the people of Asia
- Achieving economic growth, social programme, and cultural development in member countries.
- Strengthening self-reliance among the members
- Strengthening co-operation among the members as well as with other developing countries and international and regional organizations.
- Maintaining peace among the member nations in the region.
Question 3.
Explain LERMS:
Answer:
Liberalized Exchange Rate Management System (LERMS) was introduced in the budget 1992-93. Under the LERMS, Exporters of goods and services and those who are recipients of remittances from abroad could sell the bulk of their foreign exchange receipts at market-determined rates.
Similarly, those who need to import goods and services or undertake travel abroad could buy foreign exchange to meet such needs, at market-determined rates from the authorized dealers, subject to their transactions being eligible under the liberalized exchange control system. However, in respect of certain specified priority imports and transactions, provisions were made in the scheme for making an available foreign exchange at the official rate by the Reserve Bank of India.