Question 1

Besides the United States, other important source countries for FDI include?

Accepted Answer

A)  China
B)  Spain
C)  Greece
D)  India
E)  Japan E

Question 2

For the most part Canadian FDI outflow in last few years went to ________________

Accepted Answer

A)  the U.S.multinational corporations
B)  Chinese manufacturers
C)  Canadian affiliates and subsidiaries
D)  British domestic companies
E)  Japanese autoparts manufacturers C

Question 3

When a firm exports to a foreign country, foreign direct investment occurs.

Accepted Answer

A) True 
 B)False  False

Question 4

In practice, many countries have adopted neither a radical policy nor a free market policy toward FDI, but instead a policy that can best be described as pragmatic nationalism.

Accepted Answer

A) True 
 B)False

Question 5

Externalities are knowledge spillovers that occur when companies in the same industry locate in the same area.

Accepted Answer

A) True 
 B)False

Question 6

FDI is often undertaken as a response to:

Accepted Answer

A)  exporting
B)  FDI outflows
C)  FDI inflows
D)  threatened import tariffs
E)  high GDP levels

Question 7

In a ________________ view, FDI should be allowed only if the benefits outweigh the costs.

Accepted Answer

A)  communist
B)  socialist
C)  pragmatic nationalism
D)  radical
E)  liberal

Question 8

The MNE is seen as an instrument for dispersing the production of goods and services to those locations around the globe where they can be produced most efficiently, according to the ________________ view.

Accepted Answer

A)  radical
B)  free market
C)  capitalist
D)  pragmatic nationalism
E)  liberal

Question 9

A rationale for wanting control over the operations of a foreign entity is that the firm might wish to take advantage of differences in factor costs across countries, producing only part of its final product in a given country, while importing other parts from where they can be produced at a lower cost.

Accepted Answer

A) True 
 B)False

Question 10

Despite its advantages, FDI has been described as an "expensive" and "risky" international growth strategy.Other things being equal, why is FDI expensive and risky? Compare the risks involved with FDI to the risks involved with exporting and licensing.

Accepted Answer

The answer of Despite its advantages, FDI has been described...

Question 11

Four Seasons Hotels and Resorts has shifted their focus from the acquisition of foreign properties to offering management contracts for local owners of hotel properties.This shift has taken place, because __________________.

Accepted Answer

A)  the FDI climate is less favourable to hotel developments
B)  the low Canadian dollar in the early 2000s made foreign acquisitions prohibitively expensive
C)  they preferred to license their business system
D)  international travel and tourism went into a steep decline after the terrorist attacks of 9/11
E)  service was such an important component of their brand and because it ensured a steady income

Question 12

There is a branch of economic theory known as internationalization theory that seeks to explain why firms often prefer exporting to foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 13

The establishment of a wholly new operation in a foreign country is referred to as a(n):

Accepted Answer

A)  outplacement.
B)  greenfield investment.
C)  new venture.
D)  exporting.
E)  turn-key investment

Question 14

The _______________ view of FDI traces its roots to Marxist political and economic theory.

Accepted Answer

A)  radical
B)  free market
C)  pragmatic nationalism
D)  conservative
E)  social democratic

Question 15

The establishment of Japanese automakers' branch plants in Canada does not help the U.S.in terms of its _________________.

Accepted Answer

A)  Current account
B)  International accounts
C)  National account
D)  Foreign Currency account
E)  Balance of payments accounts

Question 16

Most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in the others' markets.

Accepted Answer

A) True 
 B)False

Question 17

FDI is an acronym that stands for

Accepted Answer

A)  Federation of Direct Investors.
B)  Federal Diversification Initiative.
C)  Foreign Direct Investment.
D)  Formal Direct Internationalization.
E)  Fund for Direct Investment

Question 18

Historically, there have been high levels of FDI outflows from the United States.

Accepted Answer

A) True 
 B)False

Question 19

Offshore production refers to FDI undertaken to serve the home market.

Accepted Answer

A) True 
 B)False

Question 20

The largest source country for FDI is Japan.

Accepted Answer

A) True 
 B)False

Exam 7: Foreign Direct Investment

Besides the United States, other important source countries for FDI include?

For the most part Canadian FDI outflow in last few years went to ________________

When a firm exports to a foreign country, foreign direct investment occurs.

In practice, many countries have adopted neither a radical policy nor a free market policy toward FDI, but instead a policy that can best be described as pragmatic nationalism.

Externalities are knowledge spillovers that occur when companies in the same industry locate in the same area.

FDI is often undertaken as a response to:

In a ________________ view, FDI should be allowed only if the benefits outweigh the costs.

The MNE is seen as an instrument for dispersing the production of goods and services to those locations around the globe where they can be produced most efficiently, according to the ________________ view.

Despite its advantages, FDI has been described as an "expensive" and "risky" international growth strategy.Other things being equal, why is FDI expensive and risky? Compare the risks involved with FDI to the risks involved with exporting and licensing.

Four Seasons Hotels and Resorts has shifted their focus from the acquisition of foreign properties to offering management contracts for local owners of hotel properties.This shift has taken place, because __________________.

There is a branch of economic theory known as internationalization theory that seeks to explain why firms often prefer exporting to foreign direct investment.

The establishment of a wholly new operation in a foreign country is referred to as a(n) :

The _______________ view of FDI traces its roots to Marxist political and economic theory.

The establishment of Japanese automakers' branch plants in Canada does not help the U.S.in terms of its _________________.

Most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in the others' markets.

FDI is an acronym that stands for

Historically, there have been high levels of FDI outflows from the United States.

Offshore production refers to FDI undertaken to serve the home market.

The largest source country for FDI is Japan.