Question 1

The following government policies are used to influence the flow of foreign direct investment (FDI) except

Accepted Answer

A)  restrictions on investment in strategic industries 
B)  subsidized loans 
C)  personal income taxes 
D)  restrictions on foreign ownership 
E)  withholding taxes 
A)  restrictions on investment in strategic industries 
B)  subsidized loans 
C)  personal income taxes 
D)  restrictions on foreign ownership 
E)  withholding taxes

Question 2

The theory of absolute advantage states that if a country can produce more efficiently than another country, it should specialize in the production of that good.

Accepted Answer

A) True 
 B)False

Question 3

The World Trade Organization succeeded the General Agreement on Trade and Tariffs, a world body that focused on ensuring fair trade around the world.

Accepted Answer

A) True 
 B)False

Question 4

According to the price-specie flow mechanism, if a country continues to export and accumulate gold, it will lead to inflation.

Accepted Answer

A) True 
 B)False

Question 5

The World Trade Organization (WTO)

Accepted Answer

A)  was succeeded by the General Agreement on Trade and Tariffs (GATT) 
B)  succeeded the General Agreement on Trade and Tariffs (GATT) 
C)  prefers bilateral treaties to multilateral treaties. 
D)  main goal is to reduce tariffs on consumer and capital goods 
E)  consists of the group of the twenty most industrialized countries. 
A)  was succeeded by the General Agreement on Trade and Tariffs (GATT) 
B)  succeeded the General Agreement on Trade and Tariffs (GATT) 
C)  prefers bilateral treaties to multilateral treaties. 
D)  main goal is to reduce tariffs on consumer and capital goods 
E)  consists of the group of the twenty most industrialized countries.

Question 6

Adam's Smith's theory of specialization

Accepted Answer

A)  expects a country to have absolute advantage in producing goods efficiently 
B)  expects a country to have comparative advantage in producing goods efficiently 
C)  expects a country to be able to produce more labor-intensive than capital-intensive goods 
D)  expects a country to be able to produce more capital-intensive than labor-intensive goods 
A)  expects a country to have absolute advantage in producing goods efficiently 
B)  expects a country to have comparative advantage in producing goods efficiently 
C)  expects a country to be able to produce more labor-intensive than capital-intensive goods 
D)  expects a country to be able to produce more capital-intensive than labor-intensive goods

Question 7

International trade refers to the purchase and sale of good between countries

Accepted Answer

A) True 
 B)False

Question 8

Adam Smith was the first to show that a country that has a comparative advantage in producing a good should specialize in the production of that good and world trade will increase.

Accepted Answer

A) True 
 B)False

Question 9

The Heckscher-Ohlin theorem predicts that if a country has abundant labor, it should specialize in producing labor-intensive products.

Accepted Answer

A) True 
 B)False

Question 10

Wassily Leontief found that United States imported more labor-intensive goods and exported more capital-intensive goods.

Accepted Answer

A) True 
 B)False

Question 11

Greenfield FDI refers to overseas investments by multinationals where new plants and factories are built.

Accepted Answer

A) True 
 B)False

Question 12

Brownfield investments refer to overseas investments by multinationals where new plants and factories are built.

Accepted Answer

A) True 
 B)False

Question 13

Adam Smith was among the first economists to show that two-way trade is more beneficial to a country that only exporting in exchange for gold or currencies.

Accepted Answer

A) True 
 B)False

Question 14

Withholding taxes

Accepted Answer

A)  are corporate taxes imposed on profits earned by the multinationals 
B)  are personal taxes on foreign corporate executives 
C)  are taxes paid on licensing fees earned by multinationals 
D)  are additional taxes paid on dividends repatriated by multinationals to their parent company 
A)  are corporate taxes imposed on profits earned by the multinationals 
B)  are personal taxes on foreign corporate executives 
C)  are taxes paid on licensing fees earned by multinationals 
D)  are additional taxes paid on dividends repatriated by multinationals to their parent company

Question 15

International trade refers to the

Accepted Answer

A)  exports of goods between countries 
B)  imports of goods between countries 
C)  imports and exports of goods between countries 
D)  foreign direct investments by countries 
A)  exports of goods between countries 
B)  imports of goods between countries 
C)  imports and exports of goods between countries 
D)  foreign direct investments by countries

Question 16

The State department considers the following percent ownership as sufficient for being classified as FDI

Accepted Answer

A)  10 percent 
B)  15 percent 
C)  25 percent 
D)  50 percent 
E)  100 percent 
A)  10 percent 
B)  15 percent 
C)  25 percent 
D)  50 percent 
E)  100 percent

Question 17

A new pattern in international trade is for companies from developing countries to invest in developed economies.

Accepted Answer

A) True 
 B)False

Question 18

Greenfield investments refer to

Accepted Answer

A)  construction of new plants and factories overseas 
B)  acquisition of existing plants and factories overseas 
C)  licensing agreements 
D)  joint venture agreements 
E)  portfolio investments 
A)  construction of new plants and factories overseas 
B)  acquisition of existing plants and factories overseas 
C)  licensing agreements 
D)  joint venture agreements 
E)  portfolio investments

Question 19

The economic philosophy of mercantilism

Accepted Answer

A)  encourages countries to export goods a much as possible 
B)  encourages countries to import as much goods as possible 
C)  encourages countries to invest overseas as much as possible 
D)  encourages countries to resist investments from overseas as much as possible 
A)  encourages countries to export goods a much as possible 
B)  encourages countries to import as much goods as possible 
C)  encourages countries to invest overseas as much as possible 
D)  encourages countries to resist investments from overseas as much as possible

Question 20

Horizontal FDI refers to foreign direct investment in plants and factories

Accepted Answer

A)  that contribute to the upstream and downstream segment of the company's existing business 
B)  not in the company's existing line of business 
C)  that does not contribute to the upstream segment of the company's existing business 
D)  that contributes to the upstream segment of the company's existing business 
E)  in the company's existing line of business 
A)  that contribute to the upstream and downstream segment of the company's existing business 
B)  not in the company's existing line of business 
C)  that does not contribute to the upstream segment of the company's existing business 
D)  that contributes to the upstream segment of the company's existing business 
E)  in the company's existing line of business

The following government policies are used to influence the flow of foreign direct investment (FDI) except

The theory of absolute advantage states that if a country can produce more efficiently than another country, it should specialize in the production of that good.

The World Trade Organization succeeded the General Agreement on Trade and Tariffs, a world body that focused on ensuring fair trade around the world.

According to the price-specie flow mechanism, if a country continues to export and accumulate gold, it will lead to inflation.

The World Trade Organization (WTO)

Adam's Smith's theory of specialization

International trade refers to the purchase and sale of good between countries

Adam Smith was the first to show that a country that has a comparative advantage in producing a good should specialize in the production of that good and world trade will increase.

The Heckscher-Ohlin theorem predicts that if a country has abundant labor, it should specialize in producing labor-intensive products.

Wassily Leontief found that United States imported more labor-intensive goods and exported more capital-intensive goods.

Greenfield FDI refers to overseas investments by multinationals where new plants and factories are built.

Brownfield investments refer to overseas investments by multinationals where new plants and factories are built.

Adam Smith was among the first economists to show that two-way trade is more beneficial to a country that only exporting in exchange for gold or currencies.

Withholding taxes

International trade refers to the

The State department considers the following percent ownership as sufficient for being classified as FDI

A new pattern in international trade is for companies from developing countries to invest in developed economies.

Greenfield investments refer to

The economic philosophy of mercantilism

Horizontal FDI refers to foreign direct investment in plants and factories

Introduction and Overview

International Business Environment-Culture

Economic and Other Related Environmental Variables

The Political and Legal Environment

Entry Strategies

Functional Integration

Production and Operations Management and Supply Chain Management

Outsourcing

International Finance

International Marketing

Human Resource Management and Organizational Structures

International Financial Management

International Accounting

Filters

Exam 5: International Trade and Foreign Direct Investments

The following government policies are used to influence the flow of foreign direct investment (FDI) except

The theory of absolute advantage states that if a country can produce more efficiently than another country, it should specialize in the production of that good.

The World Trade Organization succeeded the General Agreement on Trade and Tariffs, a world body that focused on ensuring fair trade around the world.

According to the price-specie flow mechanism, if a country continues to export and accumulate gold, it will lead to inflation.

The World Trade Organization (WTO)

Adam's Smith's theory of specialization

International trade refers to the purchase and sale of good between countries

Adam Smith was the first to show that a country that has a comparative advantage in producing a good should specialize in the production of that good and world trade will increase.

The Heckscher-Ohlin theorem predicts that if a country has abundant labor, it should specialize in producing labor-intensive products.

Wassily Leontief found that United States imported more labor-intensive goods and exported more capital-intensive goods.

Greenfield FDI refers to overseas investments by multinationals where new plants and factories are built.

Brownfield investments refer to overseas investments by multinationals where new plants and factories are built.

Adam Smith was among the first economists to show that two-way trade is more beneficial to a country that only exporting in exchange for gold or currencies.

Withholding taxes

International trade refers to the

The State department considers the following percent ownership as sufficient for being classified as FDI

A new pattern in international trade is for companies from developing countries to invest in developed economies.

Greenfield investments refer to

The economic philosophy of mercantilism

Horizontal FDI refers to foreign direct investment in plants and factories

Introduction and Overview

International Business Environment-Culture

Economic and Other Related Environmental Variables

The Political and Legal Environment

Entry Strategies

Functional Integration

Production and Operations Management and Supply Chain Management

Outsourcing

International Finance

International Marketing

Human Resource Management and Organizational Structures

International Financial Management

International Accounting

Filters