CBSE Sample Papers for Class 11 Business Studies Set 10 with Solutions

Students must start practicing the questions from CBSE Sample Papers for Class 11 Business Studies with Solutions Set 10 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Business Studies Set 10 with Solutions

Time Allowed: 3 Hours
Maximum Marks: 80

General Instructions:

This Question paper contains five Sections- A, B, C, D & E.

1. Section – A contains Questions 1 to 20 carrying 1 mark each.
2. Section – B contains Questions 21 to 25 carrying 3 marks each. Answers to these Questions may be in about 50 to 75 words.
3. Section – C contains Questions 26 to 28 carrying 4 marks each. Answers to these Questions may be in about 120 words.
4. Section – D contains Questions 29 to 31 carrying 5 marks each. Answers to these Questions may be in about 150 words.
5. Section – E contains Questions 32 to 34 carrying 6 marks each. Answers to these Questions may be in about 200 words

Section – A (20 Marks)

Question 1.
The activities which are carried out for the purpose of earning money or money’s worth known as non-economic activities. (True/False) [1]
Answer:
False

Question 2.
The continuity of cooperative society does not get affected by death, insolvency or bankruptcy of the members. Which advantage of cooperative society is indicated in the given statement? [1]
(A) voting right
(B) liability
(C) stable existence
(D) all of these
Answer:
(C) stable existence

Explanation: As a cooperative society has a separate identity, it is not affected by the entry or exit of its members. Death, bankruptcy or insanity of the members do not affect the continuity of a cooperative society. A society, therefore, operates unaffected by any change in the membership.

Question 3.
Which of the following is incorrect regarding the limitations of e-business? [1]
(A) Less time involved in conducting business
(B) Difficulty in acceptance by people as they hesitate to adjust new technology
(C) Low personal touch as it lacks interpersonal interactions.
(D) All statements are correct.
Answer:
(A) Less time involved in conducting business

Question 4.
Which form of business organisation is the least advantageous in terms of ease of formation? [1]
(A) Co-operative Society
(B) Joint Stock Company
(C) Sole Proprietorship
(D) Partnership
Answer:
(B) Joint Stock Company

Explanation: The formation of a company requires greater time, effort and extensive knowledge of legal requirements and the procedures involved. As compared to sole proprietorship and partnership form of organisations, formation of a company is more complex.

Question 5.
Identify the characteristics of the business : [1]
(A) Profit earning
(B) Uncertainty of return
(C) Both (A) & (B)
(D) None of the above
Answer:
(C) Both (A) & (B)

Question 6.
Which instrument acknowledges as the debt to the company? [1]
(A) Equity shares
(B) Debentures
(C) Preference shares
(D) None of the above
Answer:
(B) Debentures

Explanation: Debentures are an important instrument for raising long-term debt capital. A company can raise funds through issue of debentures, which bear a fixed rate of interest. The debenture issued by a company is an acknowledgment that the company has borrowed a certain amount of money, which it promises to repay at a future date.

Question 7.
Transport, banking, insurance, warehousing, communication, packaging and advertising are included under which industry? [1]
(A) Primary
(B) Secondary
(C) Tertiary
(D) None of these
Answer:
(C) Tertiary

Explanation: These are concerned with providing support services to primary and secondary industries as well as activities relating to trade. These industries provide service facilities. As business activities, these may be considered part of commerce because as auxiliaries to trade these activities assist trade. Included in this category are transport, banking, insurance, warehousing, communication, packaging and advertising.

Question 8.
________ is the apex body responsible for formulating policies in the sphere of foreign trade, increasing commercial relations with other countries etc. [1]
Answer:
Department of Commerce

Question 9.
Releasing of salaries online in the respective salary accounts is the example of : [1]
(A) Business-to-business commerce (B2B)
(B) Business-to-consumer commerce (B2C)
(C) Business-to-employee commerce (B2E)
(D) Consumer-to-consumer commerce (C2C)
Answer:
(C) Business-to-employee commerce (B2E)

Question 10.
The ________ created the ministry of Small Scale Industries (SSI’s) and Agro and Rural Industries (ARI’s) as the nodal ministry. [1]
Answer:
Government of India

Question 11.
________ aims at building institutional and human capacities that will encourage and support the entrepreneurial initiatives of rural people and women. [1]
Answer:
Rural Women Entrepreneurship Development (RWED)

Question 12.
Social interests and business interests are ________. [1]
(A) Contradictory
(B) Complementary
(C) Conflicting
(D) Counteractive
Answer:
(B) Complementary

Explanation: Business enterprises have started realising the fact that social interest and business interest are not contradictory. Instead, these are complementary to each other. The feeling that business can grow only through exploitation of society has given way to the belief that long-term benefit of business lies in serving the society well. So also, a useful institution like business is recognised as an essential element of a modern civilised society.

Question 13.
Enterprises must follow the laws and regulations of the country/ state in which it is operating, given statement shows the responsibility towards ________. [1]
Answer:
Community

Question 14.
Rate of dividend on preference shares is higher than the rate of interest on debentures. (True/False) [1]
Answer:
True

Question 15.
Internal trade is classified into wholesale trade and ________. [1]
Answer:
Retail trade

Question 16.
Which of the following is a function of The Chamber of Commerce and Industry? [1]
(A) Inter-state movement of goods
(B) Harmonization of sales tax structure and value added tax (VAT)
(C) Promoting sound infrastructure
(D) All of these
Answer:
(D) All of these

Read the following text and answer Q.No.17-20 on the basis of the same:

Shipra Oswal is a software professional working in T.KJndustries Ltd. at Kerela. Her parents are residing in Agra. Due to family emergency, her father asked her to send ₹4 lakhs in his saving bank account in SBI at the earliest. Shipra is having her bank account with Bank of Baroda but she has not opted for digital payment system or e-banking services. She approached her bank manager Mr. Vivek Mishra, for remittance of the amount to her father’s account. He told her that she can adopt Electronic Fund Transfer options: RTGS or NEFT. He advised her to apply for virtual banking services enlisting its benefits and started her mobile banking services from the same day. Shipra successfully transferred the amount to her father using RTGS.

Question 17.
‘________ her to apply for virtual banking services’. Which of the following is not true about Virtual banking? [1]
(A) Banking using electronic media
(B) No face-to-face interaction of customer with bank employees
(C) A customer can transfer funds using Bank Draft
(D) Payment of bills using personal digital assistant
Answer:
(C) A customer can transfer funds using Bank Draft

Question 18.
What is the full form of RTGS? [1]
(A) Real-Time Great Solution
(B) Rupee Transfer Gross Settlement
(C) Real-Time Gross Settlement
(D) Regular Transfer Gross Settlement
Answer:
(C) Real-Time Gross Settlement

Explanation: RTGS stands for Real-Time Gross Settlement. With RTGS, you can transfer funds 24×7 irrespective of bank or national holidays.

Question 19.
The reason why Shipra chose RTGS, not NEFT is: [1]
(A) Minimum transaction value of NEFT is ₹5 lakhs
(B) In RTGS, payment is not subjected to any waiting period
(C) RTGS operates on deferred Net Settlement
(D) In NEFT, payment is not subjected to any waiting period
Answer:
(B) In RTGS, payment is not subjected to any waiting period

Explanation: The term real-time gross settlement (RTGS) refers to a funds transfer system that allows for the instantaneous transfer of money and/or securities.

Question 20.
Which of the following is not the method of digital payment? [1]
(A) Debit card
(B) Credit card
(C) ATM
(D) Cash credit
Answer:
(D) Cash credit

Explanation: A Cash Credit (CC) is a short-term source of financing for a company. In other words, a cash credit is a short-term loan extended to a company by a bank.

Section – B (15 Marks)

Question 21.
Differentiate between business, profession and employment. [3]
Answer:

Basis	Business	Profession	Employment
Formation	Easy to Form and can be started with Minimal Legal Formalities except in few cases.	Need to obtain specific qualification from a recognized body (e.g. CA by ICAI, MBBS by MCI)	After signing Service contract and getting appointment letter.
Nature of work	Production of goods, Buying and selling of goods, rendering services to the consumer for monetary benefits.	Rendering of expertise services.	Performing work according to the nature of job.
Qualification	No minimum qualification is necessary.	Expertise and training in a specific field is must.	Qualification and training as prescribed by the employer.

Question 22.
Sony Ltd. is a leader of electronics. It is registered in a company and has is business operations in many countries of world. Its headquarter is in Japan (Tokyo). To manage its branches and subsidiaries in different countries, the company employs trained and professional managers. They always make use of latest technology to remain leader in electronics.
(A) Name the type of enterprise mentioned in above case.
(B) State where the headquarter of Sony is located.
(C) State two benefits of Sony mentioned in above para. [3]
Answer:
(A) Multinational Company
(B) Japan
(C) Benefits of Sony Ltd. (Multinational company):
(i) It employs trained and professional managers: Due to availability of resources and their large size, MNCs can afford to attract professionally qualified and talented personnel.
(ii) It makes use of latest technology: Availability of large resources at their disposal enables companies like Sony Ltd. to have their own Research & Development departments where they can develop and introduce new techniques.

Question 23.
What is e-banking? What are its benefits?
OR
What are the types of services? [3]
Answer:
e-banking is the method in which the customer conducts transactions electronically via internet. Some of the examples of e-banking are managing deposits accounts, online funds transfer, ATM, electronic data interchange etc.

Benefits:

• It provides 24 hours and 365 days banking services.
• Load on branches can be reduced by having centralized database for faster processing.
• Customers can make transaction from anywhere like home office market etc.
• It includes recording of each and every transactions.
• It provides greater customer satisfaction, higher security in terms of money.

OR

Following are the types of services:

Business Services: Services used by the business enterprises in conducting the activities of the business.
Example: Banking, insurance, warehousing, communication services etc.

Social Services: These are provided voluntarily to fulfill the social goals.
Example: Providing education and health facilities to the employees and their family members.

Personal Services: These are not consistent in nature. Different consumers have different services. They depend upon the customer’s priority.
Example: Tourism, restaurant etc.

Question 24.
Explain the classification of sources of funds on the basis of period. [3]
Answer:
Long-term Sources: These sources fulfill requirements for a period exceeding 5 years. The various sources are: shares, debentures, long-term borrowings and loans. These funds help in acquisition of plant, machinery etc.

Medium-Term Sources: When the funds are required for a period exceeding one year and up to 5 years. These funds include: borrowings from commercial banks, public deposits, lease financing and loans.

Short-term Sources: These funds are required for a period not exceeding one year. These funds are used most commonly for financing current assets like accounts receivable and inventories. Seasonal inventory requirements are also met by them. These funds include: Trade Credit, Loans from commercial banks and commercial papers.

Question 25.
Do you think small business units can survive in a competitive market? Explain any three factors which make way for the scope of small business enterprises. [3]
Answer:
Yes, small business units can survive in a competitive market. Factors which make way for the scope of small business enterprises are as follows:

1. Limited resources: Individuals with entrepreneurial spirit but with limited economic means and resources always have an option of starting a small business.
2. Flexibility: Small firms are usually owner operated and this allows them to expand or reduce the scale of operation, try new products, new ideas without requiring lengthy approval procedures.
3. Personal touch: Small enterprises are more likely to succeed in areas requiring personal touch in handling customers.

Section – C (12 Marks)

Question 26.
Identify the form of a business in which members have agreed to share the profits of business, carried an by all or any of them acting for all and explain any five features of this form of organisation. [4]
Answer:
The form of business organisation is partnership. Following are the features of a partnership firms:

Formation: The partnership form of organisation is governed by the Indian Partnership Act, 1932. It comes into existence through a legal agreement stating the terms and conditions of forming partnership.

Liability: The partners of a firm have unlimited liability. They are jointly and individually liable for repayment of debts, personal assets may be used for repaying debts in case the business assets are insufficient.

Risk bearing: The partners bear the risks of losses in the agreed ratio as a team. However, they also share profit as a reward for bearing risk as per the agreement.

Decision-Making and control: The partners share amongst themselves the responsibility of decision-making and control of day-to-day activities through their joint efforts.

Membership: The minimum number of members needed to start a partnership firm is two, while the maximum number is 50 as per Rule 10 of the Companies Rules (Misc. Rule 2014).

Question 27.
Neerja Craft Ltd. wants to diversify its business by opening two new divisions to deal in leather items as well as garments. For this, Finance Manager estimated the fund requirement of? 5 crores. The company has two options to
meet the fund requirement: shares or debentures. The Directors of the company found debentures as the better option
to raise the capital. Explain any four merits of raising funds through debentures to support directors’ decision.
OR
What are the advantages of raising funds from banks? [4]
Answer:
Following are the merits of debentures:
(i) Fixed income at lesser risk: Investors who want fixed income at lesser risk prefer debentures. Debentures are fixed-charge funds. They do not participate in profits of the company.
(ii) Stability: Debentures are suitable to a Company when the sales and earnings of the company are stable.
(iii) Less costly source of finance: The cost of raising funds through debentures is less costly in comparison to cost of raising funds through preference shares or equity shares. This is because interest given on the debenture is tax deductible.
(iv) No dilution of control: There is no dilution of the managerial control of the company due to the issue of debentures.

OR

Following are the advantages of raising funds from commercial banks:
(i) Optimal way of growing funds: Loan amount taken from the Bank can be increased or decreased according to the requirements of the business.
(ii) Maintenance of secrecy of deals: Secrecy of deals is maintained as the banks keep the information related to their client’s confidential.
(iii) Provides timely assistance to business: Proper timely assistance is provided by the banks to provide funds whenever required.
(iv) Easier source of funds: Loans from banks are an easier source. The formalities such as prospectus and underwriting are not required for raising of loans from banks. Thus it is an easier source of funds.

Question 28.
Give four features of statutory corporations. [4]
Answer:
Following are the features of the Statutory corporations:

Formation: Statutory corporations are set up under the Act of parliament. This corporate body is governed by the provisions of the Act. This act defines the objects, powers and privileges of the statutory corporations.

Ownership: This type of organization is wholly owned by the State Governments. The government has the full responsibility to fund these organizations. The state Government also has the power for appropriation of profits and bearing all losses, if any.

Body Corporate: It is a corporate body as it has the capacity of acting in its own name. It can enter into any contract and sue or can be sued. These corporations have separate legal existence.

Finance: This type of enterprises obtains funds by borrowings from the government. It derives the revenues generated from public by sale of goods and services. Therefore, it is financially independent with a clear control over a specified area or a particular type of commercial activity.

Section – D (15 Marks)

Question 29.
Puma stores are networks of retail shops owned and operated by Puma Company. These shops operate indifferent parts of country. One can easily identify these shops in any part of the country as they have same appearance; even their interior is also identical. All the shops are supplied the goods from head office only. Even store sell some goods at uniform prices.
(i) State the type of retail store mentioned in above case.
(ii) State any four features of retail store identified in (i).
OR
Uma is a village girl comes to Delhi to visit her relatives. She goes with her cousin to a shop, which is centrally located. She becomes astonished by the varieties of goods which are sold there.
(i) Identify the type of shop.
(ii) Quoting the lines from the above paragraph describe two characteristics of the shop.
(iii) Explain advantages of such shops. [5]
Answer:
(i) Chain store

(ii) Features of chain store:
(a) Location: These shops are located in fairly populous localities, where sufficient number of customers can be approached. The idea is to serve the customers at a point which is nearest to their residence or workplace, rather than attracting them to a central place.
(b) Centralized purchase: The manufacturing/procurement of merchandise for all the retail units is centralised at the head office, from where the goods are dispatched to each of these shops according to their requirements.
(c) Branch manager: Each retail shop is under the direct supervision of a Branch Manager, who sends daily report to head office in respect of sales, inventory and cash receipts.
(d) Centralized control: The head office controls all the stores and formulates policies to be followed by them.

OR

(i) Departmental Store

(ii) The main features of departmental store are as follows:
(a) Large size: A departmental store is a large retail room requiring large capital investment.
(b) Wide range: A departmental store deals with a wide range of products from low-priced to very expensive goods. Different varieties of goods are available in different departments.
(c) Departmentally organised: The store is departmentally organised. Goods offered for sale are classified and each department specialises in one line of product.
(d) Central purchases: Purchase of all the departments are made centrally. The departmental managers give a list of their requirements to the general manager who makes purchases for all the departments.
(e) Central location: A departmental store is located at a central place or in shopping centres, so that people from different parts of the city can easily reach there.

(iii) The advantages of departmental stores are as follows:
(a) Convenience in buying: Departmental stores, provide great convenience to customers by offering a large variety of products of their requirements at one place.
(b) Attract large number of customers: Being centrally located, these stores are able to attract a large number of customers.

Question 30.
Name the following :
(i) The economic activity showing a risk element and carried on profit.
(ii) The trade in which two countries are involved.
(iii) The trade in which goods are imported from one country for the purpose of exporting to other country.
(iv) The industry which involves breeding and reproduction of plarit and animals.
(v) The branch of commerce which removes hindrance of place.
OR
What are the features of Cooperative societies? [5]
Answer:
(i) Business
(ii) International trade
(iii) Entrepot trade
(iv) Genetic Industries
(v) Transportation

OR

Features of Cooperative societies:

(i) Voluntary membership: The membership of a cooperative society is voluntary. Every person has full freedom to join and leave cooperative society as per his/her desire. It is not compulsory to join membership and it doesn’t discriminate on the basis of caste, religion or gender.

(ii) Service motive: Main motive of a cooperative society is to provide service to its members. Surplus if generated is distributed as dividend among members according to the bye laws of society.

(iii) Legal status: Registration of a cooperative society is compulsory. The society can enter into contracts and hold property in its name, sue and can be sued by others. As a result of being a separate legal entity, it is not affected by the entry or exit of its members.

(iv) Limited liability: The liability of the members of a cooperative society is limited up to the extent of capital contributed by the members. A member’s contribution explains the amount of maximum risk he has to bear.

(v) Control: All the members are given equal chance to choose a member who will establish the managing committee. Hence, this feature makes the cooperative a self-governing.

Question 31.
Vishal buys goods in large quantities and sells them to customers.
(i) Which type of trader is Vishal?
(ii) State services to customers by this type of trade. [5]
Answer:
(i) Retailer

(ii) Services provided by the retailer to the customers are as follows:

Regular availability of the goods: Retailers maintain regular availability of variety of product from different manufacturers. This helps the customers to buy the products of their choice as and when they require.

Information about the goods: By effectively displaying the goods and through personal selling efforts; retailers provide important information about the arrival of the new goods, their special features, etc. thus helps them in making their purchase decision.

Convenience in buying: Firstly, retailers are situated very nearer to the residential areas and remain open for long hours. Secondly, retailers sell the goods of desired variety in small quantity according to customers requirements, therefore, providing convenience to customers.

Wider choice: Retailers generally keep stock of wide variety of goods, produced by different manufacturers. This enables the customers to make their choice out of the wide variety available to select the best good.

Section – E (18 Marks)

Question 32.
What are the advantages and disadvantages of issuing equity shares? [6]
Answer:
Advantages of Equity shares:

1. Higher return: Equity shareholders enjoy high returns in years of high profits. It is a return on the high risk borne by them.
2. No burden on the company: Payment of dividend is not compulsory for the company, in the years of inadequate profits or losses.
3. Permanent capital: Equity share capital is to be repaid only at the time of liquidation of the company.
4. No charge on assets: A company does not need to hypothecate its assets for raising capital through equity shares.
5. Control: Equity shareholders enjoy voting rights and the right to participate in the management of the company.
6. Increase in credit worthiness: Large equity capital enhances the company’s capacity to secure loan considerably.

Disadvantages of Equity shares:

1. Risk of fluctuating returns: High-risk capital, since in the years of losses or inadequate profits, they get no returns.
2. Higher costs of issue: Cost of issue of equity shares is higher than the cost of raising other sources of funds such as debentures, preference shares, etc.
3. Dilution of control: Issue of additional equity shares leads to the dilution of voting powers of the existing equity shareholders.
4. More formalities and procedural delays: Time-consuming formalities and statutory compliances are involved in the issue of equity shares.

Question 33.
Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.
OR
Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the factors responsible for the growing importance of these trends. [6]
Answer:
The various limitations of electronic mode of business are:

Low personal touch: The e-business lacks personal touch compared to traditional business. Thus, it is relatively less suitable mode of business in respect of product categories requiring high personal touch such as garments etc.

Incongruence between order taking/giving and order fulfillment speed: Information can flow at the click of a mouse, but the physical delivery of the product takes time. This incongruence may play on the patience of the customers.

Need for technology capability and competence of parties to e-business: e-business requires basic knowledge of computers and Internet familiarity. This limits the use of e-business in few hands.

Increased risk due to anonymity and non-traceability of parties: Internet transactions occur between cyber personalities. As such, it becomes difficult to establish the identity of the parties and their location. Therefore, it is risky to transact through internet. e-business is more risky also in the sense that there are additional hazards of impersonation and leakage of confidential information such as credit card details etc.

People resistance: The process of adjustment to new technology and new way of doing things causes stress and a sense of insecurity. As a result, people may resist an organisational plan of entry into e-business.

Ethical Fallouts: Companies use an ‘electronic eye’ to keep track of the computer files, e-mail accounts and the websites visited by their employees or others who use their network systems which is not considered right on ethical grounds.

Despite the limitations, the scope of e-business remains wide, mainly owing to the continuous implementation of new technology and new updates that help in overcoming the limitations. Websites are becoming more and more interactive to overcome the problem of ‘low touch.’ Communication technology is continually evolving to increase the speed and quality of communication through internet. Efforts are on to overcome the digital divide, for example, by resorting to such strategies as setting up of community tele-centers in villages and rural areas in India.

OR

The rapid globalisation and continuous innovations of products made changes in the modes of business. e-business and outsourcing are latest trends and more likely to continue. Hence, these are referred to as the emerging modes of business.

The factors responsible for the growing importance of these trends are:

They speed up the business process: The demands of consumers are growing, and it has become necessary to facilitate trade from anywhere and also round the clock. e-business and outsourcing help speed up the process of buying and selling around the clock.

They facilitate innovation and technology development: To sustain in the market, every business needs to innovate and develop new ideas and products. In this scenario, e-business and outsourcing have emerged as a boon for producers as they facilitate continuous development of business strategies and new technologies.

They help make available quality products at lower costs: The demand for high-quality and customised products has increased, and e-business and outsourcing play a major role in providing consumers with the required products at a reasonable cost. By facilitating the production and supply of quality products, e-business and outsourcing help to attain the objective of excellence.

They pave the way for effective post-sale services: It is important for any business to cater to the needs of its customers. e-business and outsourcing play an important role here by providing quick and effective post-sale services to customers.

Question 34.
Rebel Clothing Private Ltd. has received an order for export of ready-made shirts. What are the first six steps that
must be followed by the company to meet the export order?
OR
State the difference between the domestic and international trade. [6]
Answer:
Steps to be followed by Rebel Clothing Private Ltd. to meet the export order Rebel Clothing has already received the order or intent, hence, it will follow following steps:

Assessing Creditworthiness of the importer: Before dispatching the goods, Rebel clothing needs to assesses the creditworthiness of the importer so that there is no default in the payment. Rebel clothing should insist on getting a ‘letter of credit’ from the importer’s bank.

Obtaining Export License and completing other formalities: Rebel Clothing is required to obtain export license, for which it needs to follow the steps:
(a) Open a bank account.
(b) Apply to the concerned Regional Authority of Directorate General of Foreign Trade (DGFT), with various documents, to obtain an Import Export Code (IEC) Number.
(c) Obtaining Registration cum Membership Certificate (RCMC) from any Export Promotion Council.
(d) Register with Export Credit and Guarantee Corporation (ECGC) in order to safeguard against risk of non–payment.

Obtaining Pre-shipment Finance: In case of financial need, Rebel clothing may approach his bank for availing finance to manufacture/procure goods meant for export.

Production/Procurement of Goods: Rebel Clothing needs to produce/procure goods to be exported, as per the specifications of the importer.

Pre-shipment inspection: An inspection agency such as the Export Inspection Council of India will inspect the goods produced/ procured and issue a ‘Certificate of Inspection’ after ensuring the quality and export worthiness of the consignment.

Excise Clearance: Rebel clothing will then be required to apply to the Excise Commissioner of their region with an invoice to obtain excise clearance for obtaining ‘Duty Drawback’.

OR

Basis	Domestic Trade	International Trade
(i) Nationality of buyers and sellers	Under this people of one nation work in their respective domestic market.	Under this people from different nations work in international market.
(ii) Nationality of other stakeholders	Stakeholders like suppliers, producers, employees, Middleman etc. are of same nation.	Stakeholders like suppliers, producers, employees, Middleman etc. are of different nation
(iii) Mobility of factors of production	Factors of production like capital and labor are mobile across one nation.	Factors of production like capital and labor are mobile across different nation.
(iv) Heterogeneous customers	Usually customers are homogeneous in the domestic market	Customers are not homogeneous in international market due to different religion, caste, languages etc.
(v) Risks	Under this one nation is subject to political risk of its respective nation.	This may be the barrier to international trade as different nations have different political risks.
(vi) Policies	These are subject to different policies and regulations, laws of single nation.	These are subject to different policies and regulations, laws of multiple nations.
(vii) Currency	Only one currency is involved.	There is involvement of more than one currency.