Question 1

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 C

Question 2

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 D

Question 3

Explain how international capital transfers impact employment in the receiving and investing nation.

Accepted Answer

In the investing nation the relative share of income going to capital and the share going to labor falls,while the opposite is true in the receiving nation.As a result,the level of employment tends to fall in the investing nation and rise in the receiving nation.

Question 4

What are the basic motives for international portfolio investments?

Accepted Answer

Yield maxi

Question 5

Discuss the changes in the magnitude of foreign investment into the U.S.and U.S.investment overseas over the last fifty years.

Accepted Answer

Both the U.S.and foreigners hold far mor

Question 6

Discuss the motives for international labor migration.

Accepted Answer

International labor migration can occur

Question 7

In 2010 the percentage of Americans that were not born in the United States was roughly

Accepted Answer

A) 5 % 
B) 12 ½ % 
C) 25 % 
D) 37 ½ % 
A) 5 % 
B) 12 ½ % 
C) 25 % 
D) 37 ½ %

Question 8

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 1950 to 2004 
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 1950 to 2004 
A) U.S.direct investments abroad and foreign direct investments in the U.S.grew very rapidly from 1950 to 2004 
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 1950 to 2004

Question 9

U.S.holdings of foreign long-term securities (stocks and bonds)have ________ over the last fifty years.

Accepted Answer

A) decreased 
B) increased 
C) remained unchanged 
D) been volatile,at times increasing and at time decreasing 
A) decreased 
B) increased 
C) remained unchanged 
D) been volatile,at times increasing and at time decreasing

Question 10

International capital flows

Accepted Answer

A) increase world social welfare. 
B) increase the welfare of the host country but not the investing country. 
C) increase the welfare of the investing country but not the host country. 
D) decrease world social welfare. 
A) increase world social welfare. 
B) increase the welfare of the host country but not the investing country. 
C) increase the welfare of the investing country but not the host country. 
D) decrease world social welfare.

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 most prominent form of private international economic organization today is the

Accepted Answer

A) European Union 
B) World Trade Organization 
C) multinational corporation 
D) individual investor 
A) European Union 
B) World Trade Organization 
C) multinational corporation 
D) individual investor

Question 13

Most foreign assets in the U.S.are ___________;most U.S.assets abroad are ________.

Accepted Answer

A) direct investment;direct investment 
B) direct investment;foreign securities 
C) U.S.securities;direct investment 
D) U.S.securities;foreign securities 
A) direct investment;direct investment 
B) direct investment;foreign securities 
C) U.S.securities;direct investment 
D) U.S.securities;foreign securities

Question 14

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 15

Direct investments usually involve the transfer of all of the above except:

Accepted Answer

A) capital 
B) technology 
C) management 
D) bonds 
A) capital 
B) technology 
C) management 
D) bonds

Question 16

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

Question 17

Foreign holdings of U.S.long-term securities (stocks and bonds)have ________ over the last fifty

Accepted Answer

A) decreased 
B) increased 
C) remained unchanged 
D) been volatile,at times increasing and at time decreasing 
A) decreased 
B) increased 
C) remained unchanged 
D) been volatile,at times increasing and at time decreasing

Question 18

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 19

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

Question 20

What is vertical integration and how is it related to direct foreign investment?

Accepted Answer

Vertical integration occurs when a compa

Exam 12: International Resource Movements and Multinational Corporations

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

Foreign direct investment benefits the host nation because it:

Explain how international capital transfers impact employment in the receiving and investing nation.

What are the basic motives for international portfolio investments?

Discuss the changes in the magnitude of foreign investment into the U.S.and U.S.investment overseas over the last fifty years.

Discuss the motives for international labor migration.

In 2010 the percentage of Americans that were not born in the United States was roughly

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

U.S.holdings of foreign long-term securities (stocks and bonds)have ________ over the last fifty years.

International capital flows

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

The most prominent form of private international economic organization today is the

Most foreign assets in the U.S.are ___________;most U.S.assets abroad are ________.

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

Direct investments usually involve the transfer of all of the above except:

Owners of capital in developing countries generally

Foreign holdings of U.S.long-term securities (stocks and bonds)have ________ over the last fifty

Portfolio investments refer primarily to:

U.S.labor generally

What is vertical integration and how is it related to direct foreign investment?

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 Heckscher-Ohlin Theory

Economies of Scale, imperfect Competition, and International Trade

Economic Growth and International Trade

Economic Growth and International Trade

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

The Income Adjustment Mechanism and Synthesis of Automatic

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

Most foreign assets in the U.S.are ___;most U.S.assets abroad are .