Question 1

Countries that grow the fastest are those that adopt inward-oriented policies toward trade and foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 2

The figure given below represents the effects in the labor markets due to migration. Here the world has been divided into a high-income "North" (left panel) and a low-income "South" (right panel). Dn and Sn are the labor demand and the labor supply curves in North. Ds and (Sr + Smig) are the labor demand and pre-migration labor supply curves in South. Sr is the post-migration labor supply curve in South. The value c is the cost of migrating.    When migration is not allowed, workers in North earn _____ per hour and workers in South earn _____ per hour.

Accepted Answer

A) $6.75; $4.25 
B) $8.00; $4.25 
C) $6.75; $3.00 
D) $8.00; $3.00 
A) $6.75; $4.25 
B) $8.00; $4.25 
C) $6.75; $3.00 
D) $8.00; $3.00

Question 3

Which of the following is a likely impact of international migration?

Accepted Answer

A) The native workers in the receiving country gain welfare. 
B) The receiving country as a whole gains. 
C) The workers remaining in the country after emigration lose welfare. 
D) The country from which workers migrate out to other countries gains welfare as long as remittances are small. 
A) The native workers in the receiving country gain welfare. 
B) The receiving country as a whole gains. 
C) The workers remaining in the country after emigration lose welfare. 
D) The country from which workers migrate out to other countries gains welfare as long as remittances are small.

Question 4

Which of the following statements is true concerning the global flow of FDI since 1990?

Accepted Answer

A) The proportion of global FDI that flowed into developing countries increased. 
B) Mexico has received more FDI inflows than has the United States. 
C) The proportion of global FDI that flowed into the United States increased. 
D) FDI flows into the European Union fell. 
A) The proportion of global FDI that flowed into developing countries increased. 
B) Mexico has received more FDI inflows than has the United States. 
C) The proportion of global FDI that flowed into the United States increased. 
D) FDI flows into the European Union fell.

Question 5

Import tariffs and non-tariff barriers suggest that:

Accepted Answer

A) FDI is a substitute for exporting. 
B) exporting is preferable to FDI. 
C) exporting is preferable to licensing local firms in the foreign markets. 
D) such measures restrict the ability of MNEs' to expand their operations. 
A) FDI is a substitute for exporting. 
B) exporting is preferable to FDI. 
C) exporting is preferable to licensing local firms in the foreign markets. 
D) such measures restrict the ability of MNEs' to expand their operations.

Question 6

In the case in which foreign affiliates undertake the same kind of production as the parent firm, the affiliate _____ some trade in that product. The affiliate also _____ trade through better local marketing of other products produced by the multinational in other countries.

Accepted Answer

A) displaces; expands 
B) expands, displaces 
C) expands; expands 
D) displaces; displaces 
A) displaces; expands 
B) expands, displaces 
C) expands; expands 
D) displaces; displaces

Question 7

Should receiving countries ban all forms of immigration because non-immigrant workers in the receiving country are hurt by immigration? Discuss.

Accepted Answer

The receiving country should not ban imm

Question 8

The existence of economies of scale suggests that:

Accepted Answer

A) FDI is a complement to exporting. 
B) exporting can be preferable to FDI. 
C) licensing local firms in the foreign market is preferable to exporting. 
D) inherent disadvantages cannot be fully overcome. 
A) FDI is a complement to exporting. 
B) exporting can be preferable to FDI. 
C) licensing local firms in the foreign market is preferable to exporting. 
D) inherent disadvantages cannot be fully overcome.

Question 9

FDI outflows have a positive impact on workers in the home country.

Accepted Answer

A) True 
 B)False

Question 10

A firm that owns and controls operations in more than one country is a(n):

Accepted Answer

A) franchise. 
B) MNE. 
C) monopolist. 
D) affiliate. 
A) franchise. 
B) MNE. 
C) monopolist. 
D) affiliate.

Question 11

Most foreign direct investment is in:

Accepted Answer

A) the agricultural sector. 
B) the manufacturing sector. 
C) the mining and extraction sector. 
D) the service sector. 
A) the agricultural sector. 
B) the manufacturing sector. 
C) the mining and extraction sector. 
D) the service sector.

Question 12

Which of the following was among the policies that the Chinese government began to implement since 2006?

Accepted Answer

A) Engaging in "bidding wars" with other countries to attract FDI 
B) Phasing out many of the tax incentives which were initially provided to the foreign firms 
C) Reducing the restrictions on foreign acquisitions of Chinese publicly traded companies. 
D) Emphasizing on the quantity of investments of inbound FDI 
A) Engaging in "bidding wars" with other countries to attract FDI 
B) Phasing out many of the tax incentives which were initially provided to the foreign firms 
C) Reducing the restrictions on foreign acquisitions of Chinese publicly traded companies. 
D) Emphasizing on the quantity of investments of inbound FDI

Question 13

If movement of labor across countries is costless and painless, it can be expected that:

Accepted Answer

A) all the countries in the world will operate at the full employment level. 
B) the wage rates in the countries will equalize over time. 
C) the rate of unemployment will fall to zero in all the countries. 
D) the GDP of the countries will equalize over time. 
A) all the countries in the world will operate at the full employment level. 
B) the wage rates in the countries will equalize over time. 
C) the rate of unemployment will fall to zero in all the countries. 
D) the GDP of the countries will equalize over time.

Question 14

In 2007-2011 China was the largest recipient of direct investment flows in the world.

Accepted Answer

A) True 
 B)False

Question 15

The figure given below represents the effects in the labor markets due to migration. Here the world has been divided into a high-income "North" (left panel) and a low-income "South" (right panel). Dn and Sn are the labor demand and the labor supply curves in North. Ds and (Sr + Smig) are the labor demand and pre-migration labor supply curves in South. Sr is the post-migration labor supply curve in South. The value c is the cost of migrating.   As a result of migration, the employers in North:

Accepted Answer

A) lose $131.25 million. 
B) gain $31.25 million. 
C) gain $162.5 million. 
D) lose $100 million. 
A) lose $131.25 million. 
B) gain $31.25 million. 
C) gain $162.5 million. 
D) lose $100 million.

Question 16

Historically, the U.S. firms have shown less of a preference for FDI and management control than have firms from other investing countries.

Accepted Answer

A) True 
 B)False

Question 17

Political risk is the possibility that the government of the host country will alter its policies in ways that harm the multinational enterprise.

Accepted Answer

A) True 
 B)False

Question 18

The figure given below represents the effects in the labor markets due to migration. Here the world has been divided into a high-income "North" (left panel) and a low-income "South" (right panel). Dn and Sn are the labor demand and the labor supply curves in North. Ds and (Sr + Smig) are the labor demand and pre-migration labor supply curves in South. Sr is the post-migration labor supply curve in South. The value c is the cost of migrating.   The world's net gain due to migration is represented by the area:

Accepted Answer

A) (a + b). 
B) (e + f). 
C) (a + f). 
D) (b + f). 
A) (a + b). 
B) (e + f). 
C) (a + f). 
D) (b + f).

Question 19

The figure given below represents the effects in the labor markets due to migration. Here the world has been divided into a high-income "North" (left panel) and a low-income "South" (right panel). Dn and Sn are the labor demand and the labor supply curves in North. Ds and (Sr + Smig) are the labor demand and pre-migration labor supply curves in South. Sr is the post-migration labor supply curve in South. The value c is the cost of migrating.    The migration cost on a per hour basis is:

Accepted Answer

A) $4.25. 
B) $6.75. 
C) $2.50. 
D) $3.00. 
A) $4.25. 
B) $6.75. 
C) $2.50. 
D) $3.00.

Question 20

In the past three decades many developing countries have shifted away from restricting FDI inflows to encouraging them.

Accepted Answer

A) True 
 B)False

Exam 15: Multinationals and Migration: International Factor Movements

Countries that grow the fastest are those that adopt inward-oriented policies toward trade and foreign direct investment.

Which of the following is a likely impact of international migration?

Which of the following statements is true concerning the global flow of FDI since 1990?

Import tariffs and non-tariff barriers suggest that:

In the case in which foreign affiliates undertake the same kind of production as the parent firm, the affiliate _____ some trade in that product. The affiliate also _____ trade through better local marketing of other products produced by the multinational in other countries.

Should receiving countries ban all forms of immigration because non-immigrant workers in the receiving country are hurt by immigration? Discuss.

The existence of economies of scale suggests that:

FDI outflows have a positive impact on workers in the home country.

A firm that owns and controls operations in more than one country is a(n):

Most foreign direct investment is in:

Which of the following was among the policies that the Chinese government began to implement since 2006?

If movement of labor across countries is costless and painless, it can be expected that:

In 2007-2011 China was the largest recipient of direct investment flows in the world.

Historically, the U.S. firms have shown less of a preference for FDI and management control than have firms from other investing countries.

Political risk is the possibility that the government of the host country will alter its policies in ways that harm the multinational enterprise.

In the past three decades many developing countries have shifted away from restricting FDI inflows to encouraging them.

International Economics Is Different

The Basic Theory Using Demand and Supply

Why Everybody Trades: Comparative Advantage

Trade: Factor Availability and Factor Proportions Are Key

Who Gains and Who Loses From Trade

Scale Economies, Imperfect Competition, and Trade

Growth and Trade Part II: Trade Policy

Analysis of a Tariff

Nontariff Barriers to Imports

Arguments for and Against Protection

Pushing Exports

Trade Blocs and Trade Blocks

Trade and the Environment

Trade Policies for Developing Countries

Payments Among Nations

The Foreign Exchange Market

Forward Exchange and International Financial Investment

What Determines Exchange Rates

Government Policies Toward the Foreign Exchange Market

International Lending and Financial Crises

How Does the Open Macroeconomy Work

Internal and External Balance With Fixed Exchange Rates

Floating Exchange Rates and Internal Balance

National and Global Choices: Floating Rates and the Alternatives

Filters

In the case in which foreign affiliates undertake the same kind of production as the parent firm, the affiliate _ some trade in that product. The affiliate also _ trade through better local marketing of other products produced by the multinational in other countries.