Question 1

In recent years,Canada has virtually closed its borders to foreign workers who desire to migrate to the country.

Accepted Answer

A) True 
 B)False

Question 2

The largest share of U.S.direct investment abroad has recently gone to

Accepted Answer

A)  Canada 
B)  China 
C)  Europe 
D)  Middle East

Question 3

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

Accepted Answer

A)  Sharing research and development costs among corporations 
B)  Forestalling protectionism against imports 
C)  Establishing work rules promoting higher labor productivity 
D)  Operating at diseconomy-of-scale output levels

Question 4

Most vertical foreign investment,as implemented by multinational corporations,is "forward" in nature rather than "backward."

Accepted Answer

A) True 
 B)False

Question 5

______ would likely oppose policies that permit foreign workers to migrate more freely to the United States

Accepted Answer

A)  American workers 
B)  American owners of capital 
C)  Both American workers and American owners of capital 
D)  Neither American workers nor American owners of capital

Question 6

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,MC0=AC0.
Figure 9.1.International Joint Venture
 
-Consider Figure 9.1.Suppose that Sony Company and American Company jointly form a new firm,Venture Company,whose ball bearings replace the output sold by the parents in the domestic market.Assuming that Venture Company operates as a monopoly and that its costs equal MC0=AC0,the firm's price,output,and total profit would respectively equal:

Accepted Answer

A)  $6,2 units,$4 
B)  $4,2 units,$2 
C)  $6,4 units,$4 
D)  $4,4 units,$2

Question 7

If a joint venture among competing firms is able to cut costs by extracting wage concessions from domestic workers,national welfare increases.

Accepted Answer

A) True 
 B)False

Question 8

The smallest share of U.S.direct investment abroad has recently gone to

Accepted Answer

A)  Europe 
B)  Canada 
C)  Latin America 
D)  Middle East

Question 9

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,MC0=AC0.
Figure 9.1.International Joint Venture
 
-Consider Figure 9.1.At the equilibrium price,domestic households attain ____ of consumer surplus:

Accepted Answer

A)  $4 
B)  $8 
C)  $12 
D)  $16

Question 10

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,MC0=AC0.
Figure 9.1.International Joint Venture
 
-Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions,indicated by MC1=AC1,which result from wage concessions accepted by Venture Company employees.The net effect of Venture Company's formation on the welfare of the domestic economy is:

Accepted Answer

A)  No change 
B)  Gain of $2 
C)  Loss of $2 
D)  Loss of $4

Question 11

Concerning the decision by an American to lend or invest abroad,which of the following countries is generally considered to be the most risky?

Accepted Answer

A)  Norway 
B)  Switzerland 
C)  South Korea 
D)  Somalia

Question 12

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

Accepted Answer

A)  Forward vertical integration 
B)  Backward vertical integration 
C)  Forward horizontal integration 
D)  Backward horizontal integration

Question 13

Under U.S.tax law a parent American company can defer U.S.taxes paid on the income of its foreign subsidiary as long as that income is retained overseas rather than repatriated to the United States.

Accepted Answer

A) True 
 B)False

Question 14

The United States has discouraged the "brain drain" problem by permitting the immigration of unskilled workers while restricting the immigration of skilled persons.

Accepted Answer

A) True 
 B)False

Question 15

Foreign direct investment typically occurs when

Accepted Answer

A)  The earnings of the parent company are invested in plant expansion overseas 
B)  The parent company transfers jobs overseas 
C)  The parent company closes its foreign production plants 
D)  The parent company purchases bonds of foreign governments

Question 16

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

Accepted Answer

A)  Backward vertical integration 
B)  Forward vertical integration 
C)  Horizontal integration 
D)  Conglomerate integration

Question 17

According to U.S.tax law a multinational enterprise headquartered in the United States is allowed credits against its U.S.income tax liabilities in an amount equal to the income taxes it pays to foreign governments.

Accepted Answer

A) True 
 B)False

Question 18

Foreign-owned companies in the United States operate under more strict antitrust,environmental,and other regulations than U.S.-owned companies.

Accepted Answer

A) True 
 B)False

Question 19

"Guest worker" programs generally result in temporary migration of workers from:

Accepted Answer

A)  Wealthy nations to wealthy nations 
B)  Wealthy nations to impoverished nations 
C)  Impoverished nations to wealthy nations 
D)  Impoverished nations to impoverished nations

Question 20

The least common type of migration patterns is for people to migrate permanently from

Accepted Answer

A)  rich nations to rich nations 
B)  poor nations to poor nations 
C)  poor nations to rich nations 
D)  rich nations to poor nations

Exam 9: International Factor Movements and Multinational Enterprises

In recent years,Canada has virtually closed its borders to foreign workers who desire to migrate to the country.

The largest share of U.S.direct investment abroad has recently gone to

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

Most vertical foreign investment,as implemented by multinational corporations,is "forward" in nature rather than "backward."

______ would likely oppose policies that permit foreign workers to migrate more freely to the United States

If a joint venture among competing firms is able to cut costs by extracting wage concessions from domestic workers,national welfare increases.

The smallest share of U.S.direct investment abroad has recently gone to

Concerning the decision by an American to lend or invest abroad,which of the following countries is generally considered to be the most risky?

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

Under U.S.tax law a parent American company can defer U.S.taxes paid on the income of its foreign subsidiary as long as that income is retained overseas rather than repatriated to the United States.

The United States has discouraged the "brain drain" problem by permitting the immigration of unskilled workers while restricting the immigration of skilled persons.

Foreign direct investment typically occurs when

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

According to U.S.tax law a multinational enterprise headquartered in the United States is allowed credits against its U.S.income tax liabilities in an amount equal to the income taxes it pays to foreign governments.

Foreign-owned companies in the United States operate under more strict antitrust,environmental,and other regulations than U.S.-owned companies.

"Guest worker" programs generally result in temporary migration of workers from:

The least common type of migration patterns is for people to migrate permanently from