Question 1

_____ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

Accepted Answer

A)  Licensing 
B)  Internalization 
C)  Foreign direct investment 
D)  A merger 
A)  Licensing 
B)  Internalization 
C)  Foreign direct investment 
D)  A merger

Question 2

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

Accepted Answer

A)  Comparative advantage 
B)  Multipoint competition 
C)  Competitive advantage 
D)  Economic advantage 
A)  Comparative advantage 
B)  Multipoint competition 
C)  Competitive advantage 
D)  Economic advantage

Question 3

When a company brings capital and/or technology to a host country, the host country benefits from the:

Accepted Answer

A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI. 
A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI.

Question 4

The majority of cross-border investment in the developed world is in the form of _____.

Accepted Answer

A)  hostile takeovers 
B)  greenfield investments 
C)  competitive investments 
D)  mergers and acquisitions 
A)  hostile takeovers 
B)  greenfield investments 
C)  competitive investments 
D)  mergers and acquisitions

Question 5

What are the possible adverse effects of FDI on a host country's balance-of-payments position?

Accepted Answer

The possible adverse effects of FDI on a

Question 6

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Accepted Answer

Products with low value-to-weight ratios

Question 7

Which of the following arises when a country is exporting more goods and services than it is importing?

Accepted Answer

A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance 
A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance

Question 8

An oligopoly is an industry composed of a limited number of large firms.

Accepted Answer

A) True 
 B)False

Question 9

_____ traces its roots to Marxist political and economic theory.

Accepted Answer

A)  The radical view 
B)  Pragmatic nationalism 
C)  The free market view 
D)  The noninterventionist principle 
A)  The radical view 
B)  Pragmatic nationalism 
C)  The free market view 
D)  The noninterventionist principle

Question 10

An aspect of _____ is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants.

Accepted Answer

A)  the radical view 
B)  the noninterventionist principle 
C)  the free market view 
D)  pragmatic nationalism 
A)  the radical view 
B)  the noninterventionist principle 
C)  the free market view 
D)  pragmatic nationalism

Question 11

Discuss the trends in FDI over the last 30 years. Be sure to differentiate between the stock of FDI and the flow of FDI.

Accepted Answer

The flow of FDI refers to the amount of

Question 12

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

Accepted Answer

A) True 
 B)False

Question 13

Describe some of the home country policies that encourage outward FDI.

Accepted Answer

Many investor nations now have governmen

Question 14

Which of the following factors has had a positive effect on the volume of foreign trade investments?

Accepted Answer

A)  Emerging social democracies 
B)  Fluctuating current rates 
C)  Aging demographics 
D)  World economy globalization 
A)  Emerging social democracies 
B)  Fluctuating current rates 
C)  Aging demographics 
D)  World economy globalization

Question 15

What is double taxation in the context of FDI?

Accepted Answer

A)  Taxation at twice the normal rate for foreign companies 
B)  Taxing the producers as well as suppliers 
C)  Taxation of income in both home and host country 
D)  Taxation of both income as well as dividends paid 
A)  Taxation at twice the normal rate for foreign companies 
B)  Taxing the producers as well as suppliers 
C)  Taxation of income in both home and host country 
D)  Taxation of both income as well as dividends paid

Question 16

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

Accepted Answer

A)  Greenfield investments are characterized by reduced management control. 
B)  Mergers and acquisitions are preferred because most greenfield investments fail. 
C)  It is easier and less risky for a firm to build strategic assets than acquire similar assets. 
D)  Mergers and acquisitions are quicker to execute than greenfield investments. 
A)  Greenfield investments are characterized by reduced management control. 
B)  Mergers and acquisitions are preferred because most greenfield investments fail. 
C)  It is easier and less risky for a firm to build strategic assets than acquire similar assets. 
D)  Mergers and acquisitions are quicker to execute than greenfield investments.

Question 17

Recent years have seen a _____ in the number of countries that adhere to a radical ideology regarding FDI.

Accepted Answer

A)  marked decline 
B)  slight decline 
C)  marked increase 
D)  slight increase 
A)  marked decline 
B)  slight decline 
C)  marked increase 
D)  slight increase

Question 18

The two most common methods of restricting inward FDI are ownership restraints and _____.

Accepted Answer

A)  resource endowments 
B)  performance requirements 
C)  national sovereignty 
D)  incentives 
A)  resource endowments 
B)  performance requirements 
C)  national sovereignty 
D)  incentives

Question 19

FDI occurs when a firm:

Accepted Answer

A)  ships its products from one country to another. 
B)  invests directly in facilities to produce a product in a foreign country. 
C)  invests in the shares of another company operating in the same country. 
D)  grants permission to another company in a different country to use its brand name. 
A)  ships its products from one country to another. 
B)  invests directly in facilities to produce a product in a foreign country. 
C)  invests in the shares of another company operating in the same country. 
D)  grants permission to another company in a different country to use its brand name.

Question 20

Which of the following best describes an industry composed of a limited number of large firms?

Accepted Answer

A)  An oligopoly 
B)  A monopoly 
C)  An oligarchy 
D)  A perfectly competitive market 
A)  An oligopoly 
B)  A monopoly 
C)  An oligarchy 
D)  A perfectly competitive market

_____ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

When a company brings capital and/or technology to a host country, the host country benefits from the:

The majority of cross-border investment in the developed world is in the form of _____.

What are the possible adverse effects of FDI on a host country's balance-of-payments position?

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Which of the following arises when a country is exporting more goods and services than it is importing?

An oligopoly is an industry composed of a limited number of large firms.

_____ traces its roots to Marxist political and economic theory.

An aspect of _____ is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants.

Discuss the trends in FDI over the last 30 years. Be sure to differentiate between the stock of FDI and the flow of FDI.

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

Describe some of the home country policies that encourage outward FDI.

Which of the following factors has had a positive effect on the volume of foreign trade investments?

What is double taxation in the context of FDI?

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

Recent years have seen a _____ in the number of countries that adhere to a radical ideology regarding FDI.

The two most common methods of restricting inward FDI are ownership restraints and _____.

FDI occurs when a firm:

Which of the following best describes an industry composed of a limited number of large firms?

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

_____ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

_____ arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

When a company brings capital and/or technology to a host country, the host country benefits from the:

The majority of cross-border investment in the developed world is in the form of _____.

What are the possible adverse effects of FDI on a host country's balance-of-payments position?

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Which of the following arises when a country is exporting more goods and services than it is importing?

An oligopoly is an industry composed of a limited number of large firms.

_____ traces its roots to Marxist political and economic theory.

An aspect of _____ is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants.

Discuss the trends in FDI over the last 30 years. Be sure to differentiate between the stock of FDI and the flow of FDI.

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

Describe some of the home country policies that encourage outward FDI.

Which of the following factors has had a positive effect on the volume of foreign trade investments?

What is double taxation in the context of FDI?

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

Recent years have seen a _____ in the number of countries that adhere to a radical ideology regarding FDI.

The two most common methods of restricting inward FDI are ownership restraints and _____.

FDI occurs when a firm:

Which of the following best describes an industry composed of a limited number of large firms?

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters