Commerce MCQs

Since humans began exchanging products and services with one another, commerce has existed. From the earliest days of bartering through the formation of currencies and the establishment of trade routes, humanity has sought out ways to exchange products and services and has built a distribution system around it. The macroeconomic purchases and sales of products and services by huge entities at scale are now commonly referred to as commerce. A transaction is defined as the sale or purchase of a single item by a consumer, whereas commerce refers to all transactions relating to the purchase and selling of that item in an economy. Large organizations with hundreds of member countries also govern cross-border trade. The World Trade Organisation (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), for example, established tariff standards for products imported and exported between countries. In the twenty-first century, the concept of trade has broadened to incorporate electronic commerce. Any business or commercial transaction that involves the transfer of financial information over the Internet is referred to as e-commerce. Unlike traditional commerce between two parties, e-commerce allows individuals to trade value for goods and services with few to no obstacles.

Multiple Choice Questions

1. RBI was nationalized in which year?
   1.  1935
   2.  1947
   3.  1949
   4.  1953

Answer: C

Based on the Reserve Bank of India (Transfer to Public Ownership) Act, 1948, the Reserve Bank of India was nationalized on January 1, 1949. On payment of proper compensation, all shares in the Bank’s capital were deemed transferred to the Central Government.

2. Which committee suggested that NBFCs working in the microfinance sector be classified as NBFC-MFIs (Non-Banking Finance Company-Micro Finance Institutes)?

1. 1. Tarapore
   2.  Chandra Shekhar
   3.  Y.H. Malegam
   4.  Ranga Rajan

Answer: C

The Sub-Committee proposes that an NBFC-MFI be defined as “a company (other than a company licenced under Section 25 of the Companies Act, 1956) that primarily provides financial services to low-income borrowers with small-dollar, short-term, unsecured loans primarily for income-generating activities, with repayment schedules that are more frequent than those normally stipulated by commercial banks, and which further conforms to the regulations specified in that behalf.

3.The Indian Contract Act came into force in which of the following years?

1. 1. 1872
   2.  1905
   3.  1947
   4.  1899

Answer: A

The Indian Contract Act, 1872, which regulates Indian contract law, prescribes the law relating to contracts in India. The Act is founded on English Common Law principles. It is relevant to all Indian states. It establishes the conditions under which commitments made by contracting parties are legally enforceable. A contract is defined as an agreement that is enforceable by law under Section 2(h) of the Indian Contract Act.

4: Which of the following is a case of bailment?

1. 1.  The lease of an apartment
   2.  Property held by a lender as collateral
   3.  Conditional sale of goods
   4.  A car is parked by the driver in a self-service parking lot, and the driver locks the car and takes the key 

Answer: B

Bailment is a common-law arrangement in which the owner temporarily relinquishes physical possession of personal property (“chattel”) while maintaining ownership. The owner who relinquishes custody of a property is known as the “bailor,” and the person who takes the property is known as the “bailee.” The bailee is the person who holds personal property in trust for the owner for a specific period and a specific purpose, and then returns the property to the owner once the purpose has been fulfilled. Bailment differs from a contract of sale or a gift of property in that it just transfers possession of the property, not ownership. 

5: Sale of future goods is known as:

1. 1.  Sale on approval
   2.  Contingent sale
   3.  Normal sale
   4.  Agreement to sale

Answer: D

An agreement to sell can be described as the transfer of property in commodities that will occur in the future or will occur subject to the fulfilment of specific criteria. When the time limit for the transfer expires or the criteria for the transfer are met, the agreement to sell becomes a sale. As a result, an agreement to sell specifies the terms and circumstances of the seller’s offer to the buyer of a property.

6. Shares with no face value are known as:

1. 1.  Equal Stock
   2.  Debt Equity Stock
   3.  At par stock
   4.  No par stock

Answer: D

A stock with no par value is issued without a par value specified in the company’s articles of incorporation or on the stock certificate. The majority of today’s shares are categorised as no-par or low-par value stocks. The amount that investors are ready to pay for no-par value equities on the open market determines their price.

A stock’s par value has nothing to do with its market value. A stock with no par value can nonetheless be sold for tens or hundreds of dollars. It all relies on how much the market thinks the business is worth.

7. The basis of consumer surplus, according to Marshall, is:

1. 1. Law of diminishing MU
   2.  Law of proportions
   3.  Law of Equi-MU
   4.  All of the above

Answer: A

The Law of Diminishing MU, according to Marshall, is the foundation of consumer surplus. According to the law, the marginal utility of a commodity decreases as we buy more of it. We obtain more utility for all units of the commodities we buy because the price is set. This extra utility is referred to as “consumer surplus.”

8. The International Monetary Fund (IMF) created an international reserve asset to supplement existing reserves in response to global demand, which is known as:

1. 1.  International Monetary Right
   2.  Special Drawing Rights
   3.  Quota
   4.  None of the above

Answer: B

The International Monetary Fund (IMF) defines and maintains special drawing rights (SDRs), which are additional foreign exchange reserve assets (IMF). SDRs are the IMF’s units of account, not a currency in and of themselves. They represent a claim on IMF member countries’ currency, which they can be traded for. SDRs were formed in 1969 to fill a gap in preferred foreign exchange reserve assets such as gold and US dollars. Special drawing rights have the ISO 4217 currency code XDR and the numeric number 960.

9. What kinds of costs are paid from Gross Profit?

1. 1.  Selling expenses
   2.  General expenses
   3.  Financial expenses
   4.  All of the above

Answer: D

The profit a firm makes after deducting the costs of producing and selling its products, or the costs of delivering its services, is known as gross profit. Gross profit is computed by subtracting the cost of goods sold (COGS) from revenue on a company’s income statement (sales). On a company’s income statement, these data can be found. Gross profit is also known as gross income or sales profit.

10. First and foremost, which country initiated the World Economic Depression?

1. 1.  India
   2.  Germany
   3.  China
   4.  U.S.A

Answer: D

The Great Crisis was a significant worldwide economic depression that began in the United States in the 1930s and lasted until 1945. Around the world, the Great Depression began in 1929 and lasted until the late 1930s; in most nations, it began in 1929 and lasted until the late 1930s. It was the twentieth century’s longest, deepest, and most widespread slump. The Great Depression is a well-known illustration of how rapidly the global economy may deteriorate.

11. What is a bank’s ‘Net Interest Margin’?

1. 1.  Difference between Interest on Term Loans and Interest on Cash Credits
   2.  The Margin of Interest earned on Trading in Govt Securities
   3.  Difference between the interest income and the amount of interest paid out
   4.  Difference between the Base Interest Rate and the Average Lending Rate

Answer: C

The net interest margin (NIM) is the difference between the amount a bank earns in interest on loans and the amount it pays in interest on deposits. The net interest margin (NIM) is a measure of a bank’s profitability and growth. In 2018, the average NIM for US banks was 3.3 per cent. Since 1996, when the average was 4.3 per cent, the long-term trend has been decreasing.

12. Which of the following makes the most FDI trades?

1. 1.  ASEAN
   2.  USA
   3.  Japan, China, and the UK
   4.  EU, India, and the USA

Answer: A

By facilitating the movement of capital, talents, and information, foreign direct investment (FDI) has been critical in assisting developing economies to engage in global trade. We analyze FDI’s influence on economic growth in the Asia Pacific area and debate measures to maximize its benefits to grasp its transformational power better. In our infographic and a series of extensive publications, we look no farther than China for evidence of FDI’s impact. Companies considering a foreign direct investment usually look for firms in open economies that can provide a qualified workforce and above-average development prospects. Government regulation that isn’t overbearing is also favoured.