Question 1

When a company brings capital and/or technology to a host country, the host country benefits from the

Accepted Answer

A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI. 
A)  political effect of FDI. 
B)  resource-transfer effect of FDI. 
C)  balance-of-payments effect of FDI. 
D)  bandwagon effect of FDI.

Question 2

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

Accepted Answer

A)  Greenfield investments are characterized by reduced management control. 
B)  Mergers and acquisitions are preferred because most greenfield investments fail. 
C)  It is easier and less risky for a firm to build strategic assets than acquire similar assets. 
D)  Mergers and acquisitions are quicker to execute than greenfield investments. 
A)  Greenfield investments are characterized by reduced management control. 
B)  Mergers and acquisitions are preferred because most greenfield investments fail. 
C)  It is easier and less risky for a firm to build strategic assets than acquire similar assets. 
D)  Mergers and acquisitions are quicker to execute than greenfield investments.

Question 3

An oligopoly is an industry composed of a limited number of large firms.

Accepted Answer

A) True 
 B)False

Question 4

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

Accepted Answer

A) True 
 B)False

Question 5

________ occurs when a firm legally allows the right to produce its product, to use its production processes, or to use its brand name or trademark to another firm.

Accepted Answer

A)  Licensing 
B)  Acquisition 
C)  Internalization 
D)  Merger 
A)  Licensing 
B)  Acquisition 
C)  Internalization 
D)  Merger

Question 6

________ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

Accepted Answer

A)  Licensing 
B)  Internalization 
C)  Foreign direct investment 
D)  A merger 
A)  Licensing 
B)  Internalization 
C)  Foreign direct investment 
D)  A merger

Question 7

In general, FDI in the form of greenfield investments should increase competition.

Accepted Answer

A) True 
 B)False

Question 8

A country's ________ keep track of its payments to and its receipts from other countries.

Accepted Answer

A)  federal payments ledgers 
B)  concurrent accounts 
C)  checks-and-balances accounts 
D)  balance-of-payments accounts 
A)  federal payments ledgers 
B)  concurrent accounts 
C)  checks-and-balances accounts 
D)  balance-of-payments accounts

When a company brings capital and/or technology to a host country, the host country benefits from the

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

An oligopoly is an industry composed of a limited number of large firms.

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

________ occurs when a firm legally allows the right to produce its product, to use its production processes, or to use its brand name or trademark to another firm.

________ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

In general, FDI in the form of greenfield investments should increase competition.

A country's ________ keep track of its payments to and its receipts from other countries.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

When a company brings capital and/or technology to a host country, the host country benefits from the

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

An oligopoly is an industry composed of a limited number of large firms.

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

________ occurs when a firm legally allows the right to produce its product, to use its production processes, or to use its brand name or trademark to another firm.

________ gives a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

In general, FDI in the form of greenfield investments should increase competition.

A country's ________ keep track of its payments to and its receipts from other countries.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters