Exam 7: Foreign Direct Investment

Explain the concept of balance of payments and describe its two major components.

The realization that companies can start production in the most efficient and productive locations in the world and export to markets worldwide led to a new surge of foreign direct investment into ________.

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 investments are examples of ________.

Exports and imports of computer software,electronic components,and apparel are included in the ________ account of a country's balance of payments.

A potential problem with a rationalized production model is that a work stoppage in one country can bring the entire production process to a standstill.

Which of the following is true of foreign direct investment?

Explain the market power theory of FDI,and discuss why the decision whether or not to follow rivals into a new international market is important.

Explain the various methods that host countries use to restrict and promote foreign direct investment.

Building a subsidiary abroad from the ground up is called a greenfield investment.

Which of the following theories states that firms undertake foreign direct investment,when the features of a particular location combine with ownership and internalization advantages,to make the location appealing for investment?

The merchandise account includes exports and imports of tangible goods.

A country's ________ is a national accounting system that records all monetary transactions to entities in other countries and all receipts coming into the nation.

The requirement that a sufficient portion of a product's content must originate within a certain market to escape tariff charges is an example of a(n)________.

A company can achieve market power through ________.

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. -Which of the following methods will Happyland use to discourage foreign direct investment inflows?

The extension of a company's activities into stages of production that absorb the company's outputs is known as ________.

According to the international product life cycle theory,in which of the following stages is a good produced in the home country because of uncertain domestic demand and to keep production close to the research department?

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. -Which of the following systems of production is used by GMI?

Which of the following is the type of production illustrated in the automobile industry?

Exports and imports of tourism and business consulting are included in the ________ account of a country's balance of payments.