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Buying and selling of goods in large scale called wholesale trade.

A government incentive programme that offers a tax reduction or elimination to business is called tax holiday. 

1. Central Bank. 

2. Commercial Bank. 

It refers to two or more companies joining together forming a single business is called joint venture.

1. Easy of formation and closure. 

2. Quick decision making.

It means exchange of goods and services within the geographical boundaries.

Name of the firm and names and addresses of the firm and each partner.

It refers to the sale of goods to the other countries.

Automated Vending Machine.

The law of diminishing marginal returns states that in any production process, adding one more production unit while keeping the others constant will cause the overall output to decrease. It is also called "the law of increasing costs" because adding one more production unit diminishes the marginal returns, and the average cost of production inevitably increases.

It is typically valid on a short-term basis because over longer periods of time, it is virtually inevitable that other factors of production will also change in one way or another.

The law of diminishing marginal returns states that adding to inputs will eventually lead to a negative impact on outputs. For it to be valid, some assumptions need to be made:

• All the technology involved is constant. Changing the technological tools used in production would change the marginal and average cost and value of a product. This would negate the premises of the law of diminishing returns by changing more than one production variable.
   
• Outputs must not vary proportionately. Only one input must vary, while others remain constant at all times. This eliminates production situations where some or all inputs vary proportionately to each other.

The stages of diminishing returns:

When all the prerequisites are met, meaning that one input varies while all others stay the same, the law of diminishing returns states that production efficiency will go through three stages:

Stage 1: Increasing returns

Initially, adding to one production variable is likely to improve the output, as the fixed inputs are in abundance compared to the variable one. Therefore, adding more units of the variable factor will use the fixed factors more efficiently and increase production.

Stage 2: Diminishing returns

As more units of the variable factor are added, the overall production will continue to increase. However, during this stage, the total product increases at a continuously decreasing rate. This process culminates with the product reaching its maximum value, meaning that the marginal product becomes zero. Optimum production is set somewhere within this stage. Adding more units of the variable factor after this point will lead to the overall output starting to diminish.

Stage 3: Negative returns

Excessively adding to the variable input after the point of optimum production will eventually lead not only to a decrease in efficiency but even to a negative return of production. The excess in the variable factor now hurts the whole production process.

Business is an economic activity involving the production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs is society.

(d) New Zealand.

Certificate of origin.

Export invoice or shipping bill.

When lending increases to SMEs, the findings indicate that banks’ cost efficiency decreases due to information asymmetry. However, the increased proportion of credit guarantee can improve their cost efficiency. 

Mode of Entry into International Business 

1. Exporting and Importing: 

When goods are sold to a foreign country, it is called export trade. When goods are purchasing from a foreign country, it is called import trade. 

Advantages 

• It is the easiest way of gaining entry into international markets. 
• Business firms are not required to invest that much time and money in host countries. 
• It is less risky as compared to other modes of. entry into international business

Limitations 

• It involves additional packaging, transportation, and insurance costs. 
• Exporting is not possible in case the foreign country restricts imports. 
• The export firms do not have much contact with the foreign markets.

2. Contract Manufacturing (Outsourcing): 

When a firm enters into a contract with one or a few local manufacturers in foreign countries to get certain goods produced as per its specifications it is called contract manufacturing. It is also known as outsourcing and it can take place in the following forms. 

• Production of certain components 
• Assembly of components into final products 
• Complete manufacture of the products 

Advantages 

• It Permits international firms to get the goods produced on a large scale without requiring investment in setting up production facilities. 
• There is no investment risk involved in foreign countries.
• It helps to get the products at lower cost 
• Local producers in foreign countries can ensure greater utilization of their idle production capacities. 

Limitations 

• It may affect the quality of the products. 
• Local manufacturer in the foreign country loses his control over the manufacturing process because goods are produced strictly as per the terms and specifications of the contract. 
• The local firm cannot sell the contracted output as per their will. 

3. Licensing and Franchising: 

Licensing is a contractual arrangement in which one firm grant access to its patents, trade secrets or technology to another firm in a foreign country for a fee called royalty. The firm that grants permission is known as licensor and the firm that receives the right to use technology or patents is called the licensee. 

Franchising is similar to licensing. But it is used in connection with the provision of services. The parent company is called the franchiser and the other party to the agreement is called franchisee.

Advantages 

It is a less expensive mode of entering into international business. 

There is no investment risk 

Since the business in a foreign country is managed by the licensee/franchisee who is a local person, there are lower risks of business takeovers or government interventions.

Since licensee/franchisee is a local person, he has greater market knowledge and customer contacts. It helps the licensor/franchiser in successfully conducting its marketing operations.

Limitations 

• The licensee can start marketing an identical product under a slightly different brand name. 
• Trade secrets may lose in foreign markets. 
• Conflicts often develop between the licensor/ franchiser and licensee/franchisee over issues such as maintenance of accounts, payment of royalty, etc.

4. Joint Ventures: 

Joint venture means establishing a firm that is jointly owned by two or more independent firms. It can be brought into existence in three major ways. 

• Foreign investors buying an interest in a local firm. Local firms acquiring an interest in an existing foreign firm. 
• Both the foreign and local entrepreneurs jointly forming a new enterprise. 

Advantages 

• Since the local partner also contributes to the equity capital, the international firm has less financial burden to expand the business globally. 
• It helps to execute large projects requiring huge capital outlays and manpower. 
• The foreign business firm benefits from local partner’s knowledge of the host countries. 
• The foreign business firm shares costs and risks with local partners. So they can enter into the foreign markets very easily and without high risk. 

Limitations 

• Foreign firms entering into joint ventures share the technology and trade secrets with local firms. It leads to leakage of technology and secrets to others. 
• The dual ownership arrangement may lead to conflicts 

5. Wholly Owned Subsidiaries: 

The parent company (holding company) acquires full control over the foreign company by making 100% investment in its equity capital. It is called wholly-owned subsidiaries. It can be established in either of the two ways. i.e. 

• Setting up a new firm altogether to start operations in a foreign country. 
• Acquiring an existing firm in the foreign country. 

Advantages 

• The parent firm is able to exercise full control over its operations in foreign countries. 
• It is not required to disclose its technology or trade secrets to others. 

Limitations 

• It is not suitable for small and medium-size firms which do not have enough funds to invest abroad. 
• The parent company alone has to bear the entire losses.
• It is subject to higher political risk.

Life Insurance.

Automated Teller Machine. 

Licensing is used in connection with the production and distribution of goods. But the term franchising is used in connection with service business. Franchising is relatively more stringent than licensing.

There are two parties to a franchising agreement. They are: 

1. Franchisor – The owner of a business who provides the franchise.

2. Franchisee – The individual who gets the right to operate the business or use the trademark.

Franchising is a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of current and future customers about how the company's products and services can help them. It is a method for distributing products and services that satisfy customer needs.

(c) Narrower than legal responsibility.

General Motors.

General motors.

Departmental store.

Public Company.

(D)Both the statements are the effects of independent causes.

(d) Certificate of Origin. 

Equity Share.

(a) General stores.

(D) Both A & R are the effects of independent causes.

(C)Both the statements are the effect of a common cause. 

1. Banking and Finance. 

2. Transport and Communication.

Commercial banks provide certain services to their customers in return of some commission, these are called as agency functions.

Some of the agency functions of a commercial bank are listed below

• Collection of cheques, bills and drafts.
• Payment of interest, instalments of loans, insurance premium etc.
• Purchase and sale of securities
• Collection of interest, dividend etc.
• Transfer of funds through demand drafts, mail transfer etc.
• Purchase and sale of foreign exchange.

June 16, 2006 the MSMED act was enacted.

• Active partners contributes capital where as partner by estoppel does not contributes capital. 
• Active partners participates in management where as partner by estoppel does not participates in management.

MSME (Micro, Small, and Medium Enterprises):

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

• A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh.
• A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crores.
• A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

(b) Control by exception 

A partner by Estoppel is a person who gives an impression to others that he/she is a partner of the firm through his/her own initiative, conduct or behavior.

(b) Organising

(C) Both A & R are the effect of a common cause. 

The important documents needed during the formation of a company are Memorandum of Association, Articles of Association and Prospectus.

(A)If Statement 1 is the cause, Statement 2 is the effect.

(C) Both A and R are true 

A company can face issues in following areas:

a. Lengthy and Costly registration procedure. 

b. Excessive government regulations.

c. Conflict of interests. 

d. Restricted control .

e. Monopolistic tendencies imposed by other companies.

Correct Answer is: (b) 1991

d) Both the statements are the effects of independent causes.

(A)If A is the cause, R is the effect. 

The collegial model is based on providing economic security to the employees to strengthen the employer employee relationship. The organization acts as custodian for the employees.