Question 1

Describe the term firm heterogeneity.

Accepted Answer

Firm heterogeneity refers to the concept

Question 2

I in the OLI approach refers to:

Accepted Answer

A)  intraindustry trade. 
B)  interindustry trade. 
C)  internalization. 
D)  internationalization. 
E)  industrialization. 
A)  intraindustry trade. 
B)  interindustry trade. 
C)  internalization. 
D)  internationalization. 
E)  industrialization.

Question 3

The process of shifting profits among countries using intrafirm prices is known as:

Accepted Answer

A)  tax evasion. 
B)  money laundering. 
C)  transfer pricing. 
D)  ad valorem pricing. 
E)  none of the above. 
A)  tax evasion. 
B)  money laundering. 
C)  transfer pricing. 
D)  ad valorem pricing. 
E)  none of the above.

Question 4

A licensing agreement between a multinational corporation and a foreign firm may give the foreign firm access to new technology.

Accepted Answer

A) True 
 B)False

Question 5

The movement of some of the production process to other countries is known as:

Accepted Answer

A)  FDI. 
B)  labor transfers. 
C)  capital transfers. 
D)  ownership transfers. 
E)  offshoring. 
A)  FDI. 
B)  labor transfers. 
C)  capital transfers. 
D)  ownership transfers. 
E)  offshoring.

Question 6

.The shipment of a commodity to another country for further processing can be linked to the idea of a value chain as a _____.

Accepted Answer

A)  spider. 
B)  value line. 
C)  transportation link. 
D)  spider 
E)  None of the above 
A)  spider. 
B)  value line. 
C)  transportation link. 
D)  spider 
E)  None of the above

Question 7

Until recently, economists had very little information on the characteristics of firms engaging in international trade.

Accepted Answer

A) True 
 B)False

Question 8

Why do MNCs exist?

Accepted Answer

Multinational corporations (MNCs) exist

Question 9

The production of cars is an example of a global value chain.

Accepted Answer

A) True 
 B)False

Question 10

If a MNC owns a valuable intangible asset, then the preferred form of FDI would likely be:

Accepted Answer

A)  a wholly owned subsidiary. 
B)  a licensing agreement. 
C)  a joint venture where the foreign firm owns 51 percent. 
D)  a joint venture where the foreign firm owns 50 percent. 
E)  a binding agreement. 
A)  a wholly owned subsidiary. 
B)  a licensing agreement. 
C)  a joint venture where the foreign firm owns 51 percent. 
D)  a joint venture where the foreign firm owns 50 percent. 
E)  a binding agreement.

Question 11

What is the difference between vertical and horizontal FDI?

Accepted Answer

Foreign Direct Investment (FDI) refers t

Question 12

The ownership of a valuable intangible asset has nothing to do with FDI.

Accepted Answer

A) True 
 B)False

Question 13

Multinational corporations engaged in selling a differentiated product may find it more efficient to set up production facilities abroad to serve foreign markets.

Accepted Answer

A) True 
 B)False

Question 14

Describe the OLI approach to FDI.

Accepted Answer

The OLI approach to FDI, also known as t

Question 15

Which of the following is not a common restriction on the activities of MNCs?

Accepted Answer

A)  ownership restrictions 
B)  export requirements 
C)  local-content requirements 
D)  national treatment 
E)  None of the above. 
A)  ownership restrictions 
B)  export requirements 
C)  local-content requirements 
D)  national treatment 
E)  None of the above.

Describe the term firm heterogeneity.

I in the OLI approach refers to:

The process of shifting profits among countries using intrafirm prices is known as:

A licensing agreement between a multinational corporation and a foreign firm may give the foreign firm access to new technology.

The movement of some of the production process to other countries is known as:

.The shipment of a commodity to another country for further processing can be linked to the idea of a value chain as a _____.

Until recently, economists had very little information on the characteristics of firms engaging in international trade.

Why do MNCs exist?

The production of cars is an example of a global value chain.

If a MNC owns a valuable intangible asset, then the preferred form of FDI would likely be:

What is the difference between vertical and horizontal FDI?

The ownership of a valuable intangible asset has nothing to do with FDI.

Multinational corporations engaged in selling a differentiated product may find it more efficient to set up production facilities abroad to serve foreign markets.

Describe the OLI approach to FDI.

Which of the following is not a common restriction on the activities of MNCs?

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

Describe the term firm heterogeneity.

I in the OLI approach refers to:

The process of shifting profits among countries using intrafirm prices is known as:

A licensing agreement between a multinational corporation and a foreign firm may give the foreign firm access to new technology.

The movement of some of the production process to other countries is known as:

.The shipment of a commodity to another country for further processing can be linked to the idea of a value chain as a _____.

Until recently, economists had very little information on the characteristics of firms engaging in international trade.

Why do MNCs exist?

The production of cars is an example of a global value chain.

If a MNC owns a valuable intangible asset, then the preferred form of FDI would likely be:

What is the difference between vertical and horizontal FDI?

The ownership of a valuable intangible asset has nothing to do with FDI.

Multinational corporations engaged in selling a differentiated product may find it more efficient to set up production facilities abroad to serve foreign markets.

Describe the OLI approach to FDI.

Which of the following is not a common restriction on the activities of MNCs?

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