Question 1

Owners of capital in developing countries generally

Accepted Answer

A) oppose an inflow of foreign direct investments from abroad 
B) favor an inflow of foreign direct investments from abroad 
C) are indifferent to foreign direct investments from abroad 
D) we cannot say without additional information 
A) oppose an inflow of foreign direct investments from abroad 
B) favor an inflow of foreign direct investments from abroad 
C) are indifferent to foreign direct investments from abroad 
D) we cannot say without additional information A

Question 2

Direct investments usually involve the transfer of:

Accepted Answer

A) capital 
B) technology 
C) management 
D) all of the above 
A) capital 
B) technology 
C) management 
D) all of the above D

Question 3

Labor in developing countries generally

Accepted Answer

A) opposes an inflow of foreign direct investments from abroad 
B) favors an inflow of foreign direct investments from abroad 
C) is indifferent to foreign direct investments from abroad 
D) we cannot say without additional information 
A) opposes an inflow of foreign direct investments from abroad 
B) favors an inflow of foreign direct investments from abroad 
C) is indifferent to foreign direct investments from abroad 
D) we cannot say without additional information B

Question 4

Which of the following is not true with regard to direct investments?

Accepted Answer

A) U.S.direct investments abroad and foreign direct investments in the U.S.grew very rapidly from 1980 to 2017 
B) the amount of U.S.direct investments abroad is similar to the amount of foreign direct investments in the U.S. 
C) U.S.direct investments in Canada are higher than in Europe 
D) U.S.private holdings of foreign long-term securities grew very rapidly from 1980 to 
A) U.S.direct investments abroad and foreign direct investments in the U.S.grew very rapidly from 1980 to 2017 
B) the amount of U.S.direct investments abroad is similar to the amount of foreign direct investments in the U.S. 
C) U.S.direct investments in Canada are higher than in Europe 
D) U.S.private holdings of foreign long-term securities grew very rapidly from 1980 to

Question 5

Portfolio investments refer primarily to:

Accepted Answer

A) direct investments 
B) bonds 
C) liquid assets 
D) short-term assets 
A) direct investments 
B) bonds 
C) liquid assets 
D) short-term assets

Question 6

Foreign direct investment benefits the host nation because it:

Accepted Answer

A) increases the K/L ration 
B) increases the productivity of labor 
C) increases per capita income 
D) all of the above 
A) increases the K/L ration 
B) increases the productivity of labor 
C) increases per capita income 
D) all of the above

Question 7

Transfer pricing refers to:

Accepted Answer

A) risk diversification 
B) the pricing of the technology transferred 
C) the artificial overpricing of components shipped to an affiliate in a higher tax nation 
D) portfolio theory 
A) risk diversification 
B) the pricing of the technology transferred 
C) the artificial overpricing of components shipped to an affiliate in a higher tax nation 
D) portfolio theory

Question 8

Portfolio theory tells us that by investing in securities with yields that are inversely related over time:

Accepted Answer

A) a given yield can be obtained at a smaller risk 
B) a higher yield can be obtained for the same level of risk 
C) a two-way capital flow may be required to achieve a balanced portfolio 
D) all of the above 
A) a given yield can be obtained at a smaller risk 
B) a higher yield can be obtained for the same level of risk 
C) a two-way capital flow may be required to achieve a balanced portfolio 
D) all of the above

Question 9

The brain drain refers to the transfer of:

Accepted Answer

A) technology from developed to developing nations 
B) skilled labor and professionals from developed to developing nations 
C) unskilled labor from developing to developed nations 
D) skilled labor and professionals from less advanced to more advanced nations 
A) technology from developed to developing nations 
B) skilled labor and professionals from developed to developing nations 
C) unskilled labor from developing to developed nations 
D) skilled labor and professionals from less advanced to more advanced nations

Question 10

Which is not a reason for private foreign direct investments?

Accepted Answer

A) horizontal and vertical integration 
B) to maximize profits and diversify risks 
C) to stimulate development 
D) to avoid tariffs 
A) horizontal and vertical integration 
B) to maximize profits and diversify risks 
C) to stimulate development 
D) to avoid tariffs

Question 11

Which of the following is not a beneficial effect of direct investments on the investing country:

Accepted Answer

A) the transfer of technology 
B) higher profits 
C) risk diversification 
D) avoids the possible loss of export markets 
A) the transfer of technology 
B) higher profits 
C) risk diversification 
D) avoids the possible loss of export markets

Question 12

The reason the residents of a nation do not borrow from other nations and themselves undertake real investments in their own nation is that:

Accepted Answer

A) multinationals want to retain control over their own technology 
B) banks do not want to lend to foreigners 
C) vertical integration is not possible for foreigners 
D) multinationals want to avoid horizontal integration 
A) multinationals want to retain control over their own technology 
B) banks do not want to lend to foreigners 
C) vertical integration is not possible for foreigners 
D) multinationals want to avoid horizontal integration

Question 13

Two-way international capital flows can be explained by the desire to:

Accepted Answer

A) earn higher yields abroad 
B) avoid tariffs 
C) diversify risks 
D) all of the above 
A) earn higher yields abroad 
B) avoid tariffs 
C) diversify risks 
D) all of the above

Question 14

The basic reason for the existence of MNC is the:

Accepted Answer

A) competitive advantage of a global network of production and distribution. 
B) incentives provided by the investing nation 
C) incentives provided by the host nation 
D) imperfections of international capital markets 
A) competitive advantage of a global network of production and distribution. 
B) incentives provided by the investing nation 
C) incentives provided by the host nation 
D) imperfections of international capital markets

Question 15

U.S.labor generally

Accepted Answer

A) opposes U.S.investments abroad 
B) favors U.S.investments abroad 
C) is indifferent to U.S.investments abroad 
D) we cannot say without additional information 
A) opposes U.S.investments abroad 
B) favors U.S.investments abroad 
C) is indifferent to U.S.investments abroad 
D) we cannot say without additional information

Owners of capital in developing countries generally

Direct investments usually involve the transfer of:

Labor in developing countries generally

Which of the following is not true with regard to direct investments?

Portfolio investments refer primarily to:

Foreign direct investment benefits the host nation because it:

Transfer pricing refers to:

Portfolio theory tells us that by investing in securities with yields that are inversely related over time:

The brain drain refers to the transfer of:

Which is not a reason for private foreign direct investments?

Which of the following is not a beneficial effect of direct investments on the investing country:

The reason the residents of a nation do not borrow from other nations and themselves undertake real investments in their own nation is that:

Two-way international capital flows can be explained by the desire to:

The basic reason for the existence of MNC is the:

U.S.labor generally

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters

Exam 12: International Resource Movements and Multinational Corporations

Owners of capital in developing countries generally

Direct investments usually involve the transfer of:

Labor in developing countries generally

Which of the following is not true with regard to direct investments?

Portfolio investments refer primarily to:

Foreign direct investment benefits the host nation because it:

Transfer pricing refers to:

Portfolio theory tells us that by investing in securities with yields that are inversely related over time:

The brain drain refers to the transfer of:

Which is not a reason for private foreign direct investments?

Which of the following is not a beneficial effect of direct investments on the investing country:

The reason the residents of a nation do not borrow from other nations and themselves undertake real investments in their own nation is that:

Two-way international capital flows can be explained by the desire to:

The basic reason for the existence of MNC is the:

U.S.labor generally

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Trade and Economic Development

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters