Exam 9: International Factor Movements and Multinational Enterprises

Developing countries have sometimes feared open immigration policies of developed countries on the grounds that highly educated and skilled people may emigrate to the developed countries,thus limiting the growth potential of the developing countries.

During the 1980s and 1990s,Japanese auto firms established manufacturing facilities in the United States known as "transplants."

Figure 9.1 illustrates the market conditions facing Sony Company and American Company initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC?=AC?. Figure 9.1. International Joint Venture -Consider Figure 9.1.With Sony Company and American Company behaving as competitors,the equilibrium price and output respectively equal:

Direct foreign investment has taken all of the following forms except:

Both economic theory and empirical studies support the notion that foreign direct investment is conducted in anticipation of future profits.

In the United States,labor unions have generally resisted efforts to implement restrictions on the number of foreigners allowed into the country.

During the 1970s,American oil companies acquired nonenergy companies (e.g.,copper,auto components)in response to anticipated decreases in investment opportunities in oil.This type of diversification is referred to as:

Vertical integration occurs if a parent multinational corporation establishes foreign subsidiaries to produce intermediate goods or inputs that go into the production of a finished good.

What are the disadvantages of forming joint ventures?

Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel.This practice is referred to as:

Which of the following best refers to the outright construction or purchase abroad of productive facilities,such as manufacturing plants,by domestic residents?

Suppose General Motors charges its Mexican subsidiary $1 million for auto assembly equipment that could be purchased on the open market for $800,000.This practice is best referred to as:

Forward vertical integration would occur if a U.S.automobile manufacturer acquired a German subsidiary.