#1
What does FDI stand for?
Foreign Domestic Investment
ExplanationInvestment from foreign sources into domestic assets.
#2
Which factor is NOT a common determinant influencing FDI inflows?
Internet speed
ExplanationWhile important, internet speed isn't a primary determinant of FDI.
#3
What is the main objective of the Most Favored Nation (MFN) principle in international trade?
To ensure equal trading conditions among all nations
ExplanationTo prevent discrimination and promote fairness in trade.
#4
What does the acronym WTO stand for in the context of international trade?
World Trade Organization
ExplanationAn international organization governing global trade rules.
#5
What is the primary role of the International Monetary Fund (IMF) in the global economy?
To provide financial assistance and stabilize exchange rates
ExplanationOffering loans and advice to stabilize global finances.
#6
Which market structure is characterized by a large number of sellers and buyers, with no single firm influencing the market price?
Perfect Competition
ExplanationA theoretical market with many competitors and no market power.
#7
In the context of FDI, what does the term 'Greenfield investment' refer to?
Investment in new facilities or projects from the ground up
ExplanationEstablishing new operations in a foreign country.
#8
What is the primary characteristic of a Monopoly market structure?
One seller dominating the market
ExplanationA market with a single dominant firm controlling prices.
#9
In FDI, what is the difference between Horizontal FDI and Vertical FDI?
Horizontal involves the same industry, while Vertical involves different industries.
ExplanationHorizontal FDI expands within the same industry; vertical FDI extends to different stages of production.
#10
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
ExplanationNumerous small firms and consumers with no market control.
#11
What is the primary reason why countries adopt policies to attract FDI?
To enhance economic development
ExplanationTo stimulate growth, create jobs, and improve infrastructure.
#12
Which of the following is a motive for a country to attract FDI?
Enhance technological capabilities
ExplanationTo gain access to new technologies and skills.
#13
In an Oligopoly, how do firms typically behave?
Collude and cooperate to maximize joint profits
ExplanationFirms often coordinate actions to control the market.
#14
What is the concept of 'Market Power' in the context of market structures?
The ability of a firm to set market prices independently
ExplanationThe capability of a firm to influence market prices.
#15
Which market structure is characterized by a few large firms dominating the market and influencing prices?
Oligopoly
ExplanationMarket control by a small number of powerful firms.
#16
What is the 'Liquidity Preference Theory' associated with in economics?
Interest rates
ExplanationHow individuals balance their desire for cash and interest-bearing assets.
#17
Which of the following is a characteristic of Monopolistic Competition?
A large number of firms
ExplanationMany firms offering differentiated products.