Question 1

Which of the following are reasons for multinational corporations to pursue foreign direct investment?

Accepted Answer

A)  tariffs and foreign government laws 
B)  high returns and foreign government laws 
C)  product differentiation and exchange rates 
D)  high returns and tariffs 
E)  advanced transportation and communications. 
A)  tariffs and foreign government laws 
B)  high returns and foreign government laws 
C)  product differentiation and exchange rates 
D)  high returns and tariffs 
E)  advanced transportation and communications.

Question 2

Which of the following is not part of the OLI framework for analyzing why MNCs exist?

Accepted Answer

A)  Ownership of Intangible Assets 
B)  Wholly Owned Subsidiaries 
C)  Internalization 
D)  Locational Advantages 
E)  None of the above 
A)  Ownership of Intangible Assets 
B)  Wholly Owned Subsidiaries 
C)  Internalization 
D)  Locational Advantages 
E)  None of the above

Question 3

How does a firm decide to enter an industry?

Accepted Answer

A firm decides to enter an industry base

Question 4

Describe the costs and benefits of offshoring.

Accepted Answer

Offshoring refers to the practice of mov

Question 5

Exporters constitute a majority of firms in most countries.

Accepted Answer

A) True 
 B)False

Question 6

Exporting firms are substantially larger than firms that do not export.

Accepted Answer

A) True 
 B)False

Question 7

Among manufacturing firms, approximately_____ percent are exporters.
A) 5
B) 12
C) 20
D) 33
E) 42

Accepted Answer

However, if this question is based on a

Question 8

The acronym for John Dunning's explanation of the existence of MNCs is OLI.

Accepted Answer

A) True 
 B)False

Question 9

The existence of global value chains may enhance the traditional gains from trade.

Accepted Answer

A) True 
 B)False

Question 10

L in the OLI approach refers to:

Accepted Answer

A)  labor. 
B)  location. 
C)  leverage. 
D)  liability. 
E)  learning curve. 
A)  labor. 
B)  location. 
C)  leverage. 
D)  liability. 
E)  learning curve.

Question 11

Transfer pricing is the practice by MNCs of changing internal prices in order to minimize the firm's global tax liabilities.

Accepted Answer

A) True 
 B)False

Question 12

The highest percentage of firms that export in any industry in the U.S. is:

Accepted Answer

A)  5. 
B)  10. 
C)  15 
D)  17 
E)  None of the above 
A)  5. 
B)  10. 
C)  15 
D)  17 
E)  None of the above

Question 13

The treatment of foreign investors as if they were domestic investors is known as:

Accepted Answer

A)  intraindustry regulation. 
B)  Linder regulation. 
C)  national treatment. 
D)  offhand treatment. 
E)  consistent treatment. 
A)  intraindustry regulation. 
B)  Linder regulation. 
C)  national treatment. 
D)  offhand treatment. 
E)  consistent treatment.

Question 14

Multinational corporations are defined as firms that export to ten or more foreign countries.

Accepted Answer

A) True 
 B)False

Question 15

Firms with low TFP:

Accepted Answer

A)  tend to export. 
B)  tend to not produce for the domestic market. 
C)  tend to export 
D)  tend to have high profits. 
E)  None of the above 
A)  tend to export. 
B)  tend to not produce for the domestic market. 
C)  tend to export 
D)  tend to have high profits. 
E)  None of the above

Question 16

Global value chains negate the concept of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 17

Transfer pricing refers to:

Accepted Answer

A)  risk diversification. 
B)  the pricing of the technology transferred to the host country. 
C)  the artificial overpricing of inputs shipped to a foreign subsidiary in a higher tax country. 
D)  the pricing of a multinational stock on the NYSE. 
E)  international price discrimination. 
A)  risk diversification. 
B)  the pricing of the technology transferred to the host country. 
C)  the artificial overpricing of inputs shipped to a foreign subsidiary in a higher tax country. 
D)  the pricing of a multinational stock on the NYSE. 
E)  international price discrimination.

Question 18

Value added trade is related to:

Accepted Answer

A)  TFP. 
B)  K/L 
C)  global value chains. 
D)  trade barriers. 
E)  culture. 
A)  TFP. 
B)  K/L 
C)  global value chains. 
D)  trade barriers. 
E)  culture.

Question 19

The regulation of MNCs that is the preferred form of regulation is known as:

Accepted Answer

A)  transfer pricing. 
B)  internalization. 
C)  nonpreferential tax subsidization liability. 
D)  national treatment. 
E)  preferential treatment. 
A)  transfer pricing. 
B)  internalization. 
C)  nonpreferential tax subsidization liability. 
D)  national treatment. 
E)  preferential treatment.

Question 20

Coca-Cola has chosen to be a multinational firm because:

Accepted Answer

A)  there is not enough sugar available in the U.S. 
B)  it is a vertically integrated firm. 
C)  it wanted to take advantage of cheaper foreign labor. 
D)  it owns a valuable intangible asset. 
E)  taxes in the U.S. are too high. 
A)  there is not enough sugar available in the U.S. 
B)  it is a vertically integrated firm. 
C)  it wanted to take advantage of cheaper foreign labor. 
D)  it owns a valuable intangible asset. 
E)  taxes in the U.S. are too high.

Which of the following are reasons for multinational corporations to pursue foreign direct investment?

Which of the following is not part of the OLI framework for analyzing why MNCs exist?

How does a firm decide to enter an industry?

Describe the costs and benefits of offshoring.

Exporters constitute a majority of firms in most countries.

Exporting firms are substantially larger than firms that do not export.

Among manufacturing firms, approximately_____ percent are exporters. A) 5 B) 12 C) 20 D) 33 E) 42

The acronym for John Dunning's explanation of the existence of MNCs is OLI.

The existence of global value chains may enhance the traditional gains from trade.

L in the OLI approach refers to:

Transfer pricing is the practice by MNCs of changing internal prices in order to minimize the firm's global tax liabilities.

The highest percentage of firms that export in any industry in the U.S. is:

The treatment of foreign investors as if they were domestic investors is known as:

Multinational corporations are defined as firms that export to ten or more foreign countries.

Firms with low TFP:

Global value chains negate the concept of comparative advantage.

Transfer pricing refers to:

Value added trade is related to:

The regulation of MNCs that is the preferred form of regulation is known as:

Coca-Cola has chosen to be a multinational firm because:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

Intra-Industry Trade

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters

Exam 6: The Firm in the World Economy

Which of the following are reasons for multinational corporations to pursue foreign direct investment?

Which of the following is not part of the OLI framework for analyzing why MNCs exist?

How does a firm decide to enter an industry?

Describe the costs and benefits of offshoring.

Exporters constitute a majority of firms in most countries.

Exporting firms are substantially larger than firms that do not export.

Among manufacturing firms, approximately_____ percent are exporters. A) 5 B) 12 C) 20 D) 33 E) 42

The acronym for John Dunning's explanation of the existence of MNCs is OLI.

The existence of global value chains may enhance the traditional gains from trade.

L in the OLI approach refers to:

Transfer pricing is the practice by MNCs of changing internal prices in order to minimize the firm's global tax liabilities.

The highest percentage of firms that export in any industry in the U.S. is:

The treatment of foreign investors as if they were domestic investors is known as:

Multinational corporations are defined as firms that export to ten or more foreign countries.

Firms with low TFP:

Global value chains negate the concept of comparative advantage.

Transfer pricing refers to:

Value added trade is related to:

The regulation of MNCs that is the preferred form of regulation is known as:

Coca-Cola has chosen to be a multinational firm because:

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

Intra-Industry Trade

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters