UGC NET Commerce Unit 1 PYQs, Important Questions with Answers

UGC NET Commerce Unit 1 Important PYQs focus on  Business Environment and International Business, one of the most important sections of the UGC NET Commerce syllabus. Questions are frequently asked on international trade theories, globalization, WTO, regional economic integrations, foreign exchange management, balance of payments, and international business environment.

Since many questions are concept-based and involve international institutions, trade agreements, and business policies, candidates must develop both factual knowledge and conceptual understanding. Practicing Previous Year Questions (PYQs) helps candidates identify recurring themes, understand the examination pattern, and improve accuracy in the examination.

What Does the UGC NET Commerce Unit 1 PYQ Session Cover?

This UGC NET Commerce Unit 1 session focuses on important International Business topics repeatedly asked in previous examinations. Key areas covered include:

• TRIMS and its incorporation into the GATT Framework

• WTO Rounds and the Bretton Woods Conference (India's representation by C.D. Deshmukh)

• Absolute Advantage Theory and its assumptions

• Comparative Advantage Theory (David Ricardo)

• Uppsala Internationalization Model

• Geocentric, Polycentric, Regiocentric, and Ethnocentric Orientations

• FEMA (Foreign Exchange Management Act) and its enforcement

• Amended FDI Policy (Space Sector FDI norms)

• Consumer Protection Act amendments (District Commission jurisdiction limits)

• NAFTA, EU, ASEAN, UNCTAD – establishment timelines

• NAFTA vs USMCA differences

• Greenfield, Brownfield, FPI, and Forward Vertical FDI

• Stages of Economic Integration and Global Market Entry

• Balance of Payments (BoP) – Current, Capital, and Financial Account

• BoP Equilibrium Conditions

• World Bank related statements

• WTO Organizational Structure (Ministerial Conference, General Council, Dispute Settlement Body)

Important PYQs for UGC NET Commerce Unit 1

These important Previous Year Questions cover major Business Environment and International Business topics frequently asked in UGC NET examinations.

Question 1:
What are the assumptions of Absolute Advantage Theory?

1. There is no transportation cost.

2. The factors of production or inputs (such as labor and capital) are mobile between countries.

3. Resources are heterogeneous within a country. For example, all the workers in a country have different skills, qualifications, productivity, and motivation.

4. Both countries have the same factor endowment in terms of the quality of their resources.
   (A) only 1
   (B) 2 and 3
   (C) 2 and 4
   (D) 1, 2, and 4

Question 2:
What are the steps of doing the Uppsala Internationalization Model:

1. No regular export activities (sporadic export).

2. Foreign production/manufacturing units,

3. Establishment of a foreign sales subsidiary.

4. Export via independent representative (export mode).
   (A) 1, 4, 3, 2
   (B) 1, 2, 3, 4
   (C) 1, 3, 4, 2
   (D) 1, 4, 2, 3

Question 3:

1. District Commission shall have jurisdiction to entertain complaints where the value of the goods or services paid as consideration does not exceed _________ rupees?

2. Period within which complaint shall be accepted _________?
   (A) 50 Lakh, within 21 days
   (B) 10 crores, within 45 days
   (C) 10 lakh, within 90 days
   (D) 1 lakh, within 21 days

Question 4:
Match the following:

Column I:
A. GEOCENTRIC ORIENTATION
B. POLYCENTRIC OPERATION
C. REGIOCENTRIC ORIENTATION
D. ETHNOCENTRIC ORIENTATION

Column II:

1. Which are applicable in the domestic market are equally applicable in the overseas market as well.

2. Group of countries that have comparable market characteristics.

3. Each country is treated as a separate entity or part and individual strategies are to be carried out for each country.

4. Worldwide same approach to marketing, distribution, pricing, etc. and its operations become global.

(A) A-4, B-3, C-2, D-1
(B) A-1, B-2, C-3, D-4
(C) A-2, B-3, C-4, D-1
(D) A-2, B-1, C-4, D-3

Question 5:
Who has propounded the "Comparative Advantage Theory":
(A) Adam Smith
(B) David Ricardo
(C) A. Pigou
(D) A. Marshall

Question 6:
Which one of the followings is not a category under Balance of Payments?
(A) Current Account
(B) Capital Account
(C) Drawings Account
(D) Official Reserve Account

Question 7:
Match List - I with List - II.

List - I:
A. Greenfield Investment
B. Foreign Portfolio Investment
C. Forward Vertical FDI
D. Brownfield Investment

List - II:
I. Direct Investment overseas aimed to sell the output of a firm's domestic production process
II. Overseas investment to acquire existing facilities
III. Overseas investment to create new facilities from the ground up
IV. Investment in foreign financial instruments such as foreign stock, government bonds etc.

Choose the correct answer from the options below:
(A) A-III, B-IV, C-II, D-I
(B) A-I, B-II, C-III, D-IV
(C) A-IV, B-III, C-I, D-II
(D) A-III, B-IV, C-I, D-II

Question 8:
Arrange the following institutions as per their year of establishment in ascending order:
A. NAFTA
B. EU
C. ASEAN
D. UNCTAD

(A) A, B, C, D
(B) D, A, C, B
(C) B, D, C, A
(D) B, C, A, D

Question 9:
Which new initiative in the FTP 2023-28 aims to enhance India's position in global trade by using its currency?
(A) Export Promotion Capital Goods Scheme
(B) Special Economic Zones
(C) Internationalisation of Rupees
(D) Merchanting Trade Reform

Question 10:
The following are the statements regarding the amended foreign direct investment policy of India:

Statement I: Launch Vehicles and associated systems or subsystems, Creation of Spaceports for launching and receiving Spacecraft. Beyond 74% of these activities are under the government route.

Statement II: Under space sector 100% FDI is allowed.

Choose the correct option from those below.
(A) Both statement I and statement II is incorrect.
(B) Statement I is correct and Statement II is incorrect.
(C) Both statement I and statement II are correct.
(D) Statement I is incorrect and statement II is correct.

Preparation Tips for UGC NET Commerce Unit 1

Commerce Unit 1 contains both conceptual and factual topics. Candidates can improve their preparation by following these strategies:

• Revise international trade theories regularly, especially Absolute Advantage Theory and Comparative Advantage Theory (David Ricardo, 1817).

• Memorize important years related to WTO Ministerial Conferences (Geneva 1998, Cancun 2003, Hong Kong 2005, Bali 2013) and regional trade agreements like NAFTA (1994), EU (1993), ASEAN (1967), and UNCTAD (1964).

• Understand FEMA, its enforcement date (June 1, 2000), and amended FDI policy norms, including space sector FDI provisions.

• Focus on Balance of Payments, Current Account, Capital Account, and Financial Account concepts, along with BoP equilibrium conditions.

• Learn the differences between NAFTA and USMCA, and understand the stages of economic integration from least to most integrated.

• Practice assertion-reason and match-the-following questions, such as matching Greenfield, Brownfield, FPI, and Forward Vertical FDI with their definitions.

• Revise globalization and orientation strategies, including Geocentric, Polycentric, Regiocentric, and Ethnocentric orientations, along with the Uppsala Internationalization Model.

• Solve PYQs repeatedly to identify recurring examination trends, especially WTO-related questions (Ministerial Conference, General Council, Dispute Settlement Body, Trade Negotiations Committee).

• Prepare short notes on the Consumer Protection Act amendments (district commission jurisdiction limits, complaint acceptance period) and Bretton Woods Conference details.

Regular revision and PYQ practice can significantly improve conceptual understanding and examination performance.