Exam 7: Foreign Direct Investment

Ownership restrictions and performance demands are used by ________.

Ownership restrictions is a method used by host countries to restrict incoming foreign direct investment.

When a U.S.company buys shares of stock in a French company on France's stock market,the U.S.balance of payments records the transaction as an ________.

Global Manufacturing Inc.(GMI) Global Manufacturing Inc. ,a fast-growing U.S.company,plans for a production system in which two components of its product will be manufactured in locations where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI plans to purchase an existing company in Brazil to produce component A and build a subsidiary in Thailand to produce component B. -GMI's purchase of the Brazilian company is best classified as a(n)________.

Describe any three management issues involved in foreign direct investment decisions.

A current account deficit occurs when a country exports more goods and receives more income from abroad than it imports and pays abroad.

Which of the following is recorded in the capital account of a country's balance of payments?

Which of the following methods is being used when a host country provides lower tax rates and low-interest loans to firms from abroad for encouraging inflows of foreign direct investment?

The eclectic theory states that firms undertake foreign direct investment only when the features of a particular location make the location appealing for investment.

A market that is said to operate at peak efficiency and where goods are readily and easily available is said to be a(n)________ market.

Global Manufacturing Inc.(GMI) Global Manufacturing Inc. ,a fast-growing U.S.company,plans for a production system in which two components of its product will be manufactured in locations where the cost of production is lowest.The components will then be taken to maquiladoras for final assembly.GMI plans to purchase an existing company in Brazil to produce component A and build a subsidiary in Thailand to produce component B. -GMI's subsidiary for component B in Thailand is best described as a(n)________.

In the maturing product stage of the international product life cycle theory,increased competition creates pressures to reduce production costs.

A firm's subsidiary built abroad from the ground up is called a(n)________.

Happyland Happyland is a country characterized by beautiful beaches,vast natural resources,and a highly skilled labor force.Happyland is now encouraging foreign direct investment flows.The country has been exporting textiles,computer hardware,and software programs.The net result of the trade is that Happyland exports far more goods and services and receives more income from abroad than it imports and pays abroad. -Transactions involving the export of Happyland's textile and computer products are included in its ________ account.

In the ________ product stage of the international product life cycle theory,increased competition pressurizes a company to build production facilities in low-cost developing nations.

Tax breaks on profits earned abroad and political pressures are used by ________.

Which of the following occurs in a country's balance of payments when a country exports more goods and services and receives more income from abroad than it imports and pays abroad?

Identify why a home country might support or discourage outgoing foreign direct investment.

A(n)________ advantage is the advantage of conducting a particular economic activity in a specific area because of the characteristics of that area.

A majority of the regulatory changes that governments around the world introduced in recent years are unfavorable to FDI.