UGC NET Paper 1 December (Pack of 7) - UGC NET Paper 1 6th December 2019 Evening Shift

Avatto>>UGC NET PAPER 1>>PREVIOUS YEAR SOLVED PAPERS>>UGC NET Paper 1 December (Pack of 7)>>UGC NET Paper 1 6th December 2019 Evening Shift

Read the given passage and answer the question that follows :
The motives for direct investments abroad are generally the same as earning higher returns, possibly resulting from higher growth rates abroad, more favorable tax treatment or greater availability of infrastructure and diversifying risks. Indeed, it has been found that firms with a strong international orientation, either through exports or through foreign production and/or sales facilities, are more profitable, and have a much smaller variability in profits than purely domestic firms. Although these reasons are sufficient to explain international investments they leave one basic question unanswered with regard to direct foreign investments. That is, they cannot explain why the residents of a nation do not borrow from other nations and themselves make real investments in their own nation rather than accept direct investments from abroad. After all, the residents of a nation can be expected to be more familiar with local conditions and thus to be at a competitive advantage with respect to foreign investors. There are several explanations for this. The most important is that many large corporations, usually in monopolistic and oligopolistic markets, often have some unique production knowledge or managerial skill that could easily and profitably be utilized abroad and over which the corporation wants to retain direct control. In such a situation, the firm will make direct investments abroad. This involves horizontal integration or the production abroad of a differentiated product that is also produced at home. This helps serve the foreign market better by adapting to local conditions than through exports.

46. In the case of direct foreign investments, what factor remains unaddressed?

  • Option : B
  • Explanation :
    Refer to the lines, ' ... they leave one basic question unanswered .... rather than accept direct investments from abroad.'
Cancel reply
Cancel reply

Read the given passage and answer the question that follows :
The motives for direct investments abroad are generally the same as earning higher returns, possibly resulting from higher growth rates abroad, more favorable tax treatment or greater availability of infrastructure and diversifying risks. Indeed, it has been found that firms with a strong international orientation, either through exports or through foreign production and/or sales facilities, are more profitable, and have a much smaller variability in profits than purely domestic firms. Although these reasons are sufficient to explain international investments they leave one basic question unanswered with regard to direct foreign investments. That is, they cannot explain why the residents of a nation do not borrow from other nations and themselves make real investments in their own nation rather than accept direct investments from abroad. After all, the residents of a nation can be expected to be more familiar with local conditions and thus to be at a competitive advantage with respect to foreign investors. There are several explanations for this. The most important is that many large corporations, usually in monopolistic and oligopolistic markets, often have some unique production knowledge or managerial skill that could easily and profitably be utilized abroad and over which the corporation wants to retain direct control. In such a situation, the firm will make direct investments abroad. This involves horizontal integration or the production abroad of a differentiated product that is also produced at home. This helps serve the foreign market better by adapting to local conditions than through exports.

47. Purely domestic firms are affected by

  • Option : C
  • Explanation :
    Refer to the lines, ' ... firms with a strong international orientation .... have a much smaller variability in profits than purely domestic firms.'
Cancel reply
Cancel reply

Read the given passage and answer the question that follows :
The motives for direct investments abroad are generally the same as earning higher returns, possibly resulting from higher growth rates abroad, more favorable tax treatment or greater availability of infrastructure and diversifying risks. Indeed, it has been found that firms with a strong international orientation, either through exports or through foreign production and/or sales facilities, are more profitable, and have a much smaller variability in profits than purely domestic firms. Although these reasons are sufficient to explain international investments they leave one basic question unanswered with regard to direct foreign investments. That is, they cannot explain why the residents of a nation do not borrow from other nations and themselves make real investments in their own nation rather than accept direct investments from abroad. After all, the residents of a nation can be expected to be more familiar with local conditions and thus to be at a competitive advantage with respect to foreign investors. There are several explanations for this. The most important is that many large corporations, usually in monopolistic and oligopolistic markets, often have some unique production knowledge or managerial skill that could easily and profitably be utilized abroad and over which the corporation wants to retain direct control. In such a situation, the firm will make direct investments abroad. This involves horizontal integration or the production abroad of a differentiated product that is also produced at home. This helps serve the foreign market better by adapting to local conditions than through exports.

48. What advantage do large corporations have in oligopolistic markets?

  • Option : A
  • Explanation :
    Refer to the lines, ' ... many large corporations, usually in monopolistic and oligopolistic markets ... wants to retain direct control.'
Cancel reply
Cancel reply

Read the given passage and answer the question that follows :
The motives for direct investments abroad are generally the same as earning higher returns, possibly resulting from higher growth rates abroad, more favorable tax treatment or greater availability of infrastructure and diversifying risks. Indeed, it has been found that firms with a strong international orientation, either through exports or through foreign production and/or sales facilities, are more profitable, and have a much smaller variability in profits than purely domestic firms. Although these reasons are sufficient to explain international investments they leave one basic question unanswered with regard to direct foreign investments. That is, they cannot explain why the residents of a nation do not borrow from other nations and themselves make real investments in their own nation rather than accept direct investments from abroad. After all, the residents of a nation can be expected to be more familiar with local conditions and thus to be at a competitive advantage with respect to foreign investors. There are several explanations for this. The most important is that many large corporations, usually in monopolistic and oligopolistic markets, often have some unique production knowledge or managerial skill that could easily and profitably be utilized abroad and over which the corporation wants to retain direct control. In such a situation, the firm will make direct investments abroad. This involves horizontal integration or the production abroad of a differentiated product that is also produced at home. This helps serve the foreign market better by adapting to local conditions than through exports.

49. The passage focuses on the aspects mainly related to

  • Option : B
  • Explanation :
    The passage focuses on the aspects mainly related to international orientation of investment. It analyses that international corporations are more profitable than domestic firms and prefer direct investment to exports so as to utilise their unique production knowledge or managerial skills profitably on foreign soil. For this reason" nations do not have the choice to borrow from other nations and make real investments in their own land.
Cancel reply
Cancel reply

Read the given passage and answer the question that follows :
The motives for direct investments abroad are generally the same as earning higher returns, possibly resulting from higher growth rates abroad, more favorable tax treatment or greater availability of infrastructure and diversifying risks. Indeed, it has been found that firms with a strong international orientation, either through exports or through foreign production and/or sales facilities, are more profitable, and have a much smaller variability in profits than purely domestic firms. Although these reasons are sufficient to explain international investments they leave one basic question unanswered with regard to direct foreign investments. That is, they cannot explain why the residents of a nation do not borrow from other nations and themselves make real investments in their own nation rather than accept direct investments from abroad. After all, the residents of a nation can be expected to be more familiar with local conditions and thus to be at a competitive advantage with respect to foreign investors. There are several explanations for this. The most important is that many large corporations, usually in monopolistic and oligopolistic markets, often have some unique production knowledge or managerial skill that could easily and profitably be utilized abroad and over which the corporation wants to retain direct control. In such a situation, the firm will make direct investments abroad. This involves horizontal integration or the production abroad of a differentiated product that is also produced at home. This helps serve the foreign market better by adapting to local conditions than through exports.

50. The possible reasons of direct foreign investment can be
A. Higher returns
B. Better tax regimes
C. Availability of infrastructure
D. Risk mitigation
E. Financial support from local investors
Choose the correct answer from the options given below:

  • Option : B
  • Explanation :
    Refer to the opening sentence, 'The motives for direct investment abroad ... diversifying risks.' It says the motives are same as higher returns but the reasons behind this are better tax regimes, availability of infrastructure and risk mitigation in foreign countries. International corporations have no dearth of finances; they do not require funding from local investors.
Cancel reply
Cancel reply