Exam 9: International Factor Movements and Multinational Enterprises

Mergers differ from joint ventures in that they involve the creation of a new business firm,rather than the union of two existing companies.

Multinational enterprises:

Multinational enterprises face problems since they:

Conglomerate integration would occur if General Motors Inc.of the United States acquired a controlling interest in a British chemical company.

Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods?

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S? and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D?. Figure 9.2. U.S. Labor Market -Consider Figure 9.2.Policies that permit Mexican workers to freely migrate to the United States would likely be resisted by:

Foreign direct investment typically occurs when

All of the following are potential advantages of an international joint venture except:

Critics of U.S.trade and immigration policy maintain that

In natural-resource oriented industries,such as oil and copper,joint ventures have often been formed by several companies since the cost of resource-extraction may be prohibitively large for a particular company.

Multinational corporations sometimes locate manufacturing subsidiaries abroad to avoid tariff barriers which would place their products at a competitive disadvantage in a foreign country.

Horizontal integration would occur if General Motors sets up a subsidiary in Mexico to produce automobiles identical to those that it produces in the United States.

Due to transfer-pricing problems,multinational corporations must shift profits away from countries with low corporate tax rates to high tax-rate countries,thus absorbing a larger tax bite.

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S? and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D?. Figure 9.2. U.S. Labor Market -Consider Figure 9.2.At labor market equilibrium,the payment to U.S.capital owners equals:

Multinational enterprises:

Most foreign direct investment in the United States occurs in:

Most multinational corporations have a low ratio of foreign sales to total sales,usually 5 percent or less.

By establishing transplant factories in the United States,Japanese automakers were able to avoid export restrictions imposed by the Japanese government,but not import restrictions imposed by the U.S.government.

Both Coca-Cola Co.and Pepsi-Cola Co.are multinational firms in that their soft drinks are bottled throughout the world.This practice illustrates:

Mexico's ____ refer to an assemblage of U.S.-owned companies that use U.S.-owned parts and Mexican assembly to manufacture goods that are exported to the United States.