Exam 7: Foreign Direct Investment

Scenario: Blickinstock at the Crossroads Auto parts supplier,Blickinstock Ltd. ,would like to expand its presence in Latin America.To that end,Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary.Keith Moon,Blickinstock's vice president of global business development,will be making a presentation to the board outlining the company's options. -Which of the following is the LEAST likely reason why Blickinstock should consider building its own subsidiary?

Which of the following occurs when a country exports more goods and services and receives more income from abroad than it imports?

________ is the advantage that arises from internalizing a business activity rather than leaving it to a relatively inefficient market.

Factors of production include things such as labour,financial capital,capital equipment,and land or natural resources.

Scenario: Happyland Happyland,a country of about 48 million people with beautiful beaches,vast natural resources,and a highly skilled labour force,is encouraging foreign direct investment inflows.The country has been exporting textiles,computer hardware,and software.The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -If Happyland markets its beaches and attracts tourists,the tourism-related income would be recorded in its ________.

The soaring cost of developing subsequent stages of technology has led multinationals to engage in cross-border alliances and acquisitions.

Which of the following is the extension of company activities into stages of production that provide a firm's inputs or absorb its outputs?

The appeal of purchasing existing facilities is reduced by the potential for each of the following EXCEPT ________.

A potential problem with rationalized production is that ________.

The ________ theory states that firms undertake foreign direct investment when the features of a particular location combine with ownership and internalization advantages to make a location appealing for an investment.

The advantage of locating a particular economic activity in a specific location because of the characteristics of that location is called a(n)________.

Distinguish between the different advantages identified by the eclectic theory.

Canada is considered to be one of the most restrictive countries for foreign direct investment (FDI).

According to the eclectic theory,an ownership advantage is the advantage of locating a particular economic activity in a specific location because of the characteristics of that location.

Two main reasons for foreign direct investment flows are globalization and diversity.

Which of the following is NOT one of the four main theories that attempts to explain why companies engage in foreign direct investment?

In the ________ stage of the international product life cycle,a good is produced in the home country because of uncertain domestic demand and to keep production close to the research department that developed the product.

Scenario: Happyland Happyland,a country of about 48 million people with beautiful beaches,vast natural resources,and a highly skilled labour force,is encouraging foreign direct investment inflows.The country has been exporting textiles,computer hardware,and software.The net result of trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -Which of the following is Happyland LEAST likely to use to encourage foreign direct investment inflows?

Which of the following records transactions involving the export of services?

The purchase of physical assets or a significant amount of ownership (stock)of a company in another country to gain a measure of management control is called ________.