Question 1

How does the eclectic theory explain the concept of FDI? How can a host country offer incentives to attract FDI?

Accepted Answer

The eclectic theory states that firms un

Question 2

Exports and imports of tangible goods are included in the ________ account of a country's balance of payments.

Accepted Answer

A) savings 
B) capital 
C) merchandise 
D) services 
A) savings 
B) capital 
C) merchandise 
D) services

Question 3

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.
-If Happyland advertises its beaches and attracts tourists,the tourism-related income would be recorded in its ________ account.

Accepted Answer

A) capital 
B) services 
C) income payments 
D) merchandise 
A) capital 
B) services 
C) income payments 
D) merchandise

Question 4

Partnerships between a government and a host company in the context of foreign direct investment lead to ________.

Accepted Answer

A) increased exploitation of workers in the home country 
B) domination of industries in the home country by large international firms 
C) increased market access for the host company 
D) increased control for the host country over its operations 
A) increased exploitation of workers in the home country 
B) domination of industries in the home country by large international firms 
C) increased market access for the host company 
D) increased control for the host country over its operations

Question 5

Which of the following is an example of a greenfield investment?

Accepted Answer

A) an agricultural business acquisition in South-east Asia's former agricultural region 
B) the construction of an entirely new steel manufacturing subsidiary overseas 
C) a merger between a U.S.and a non-U.S.company 
D) the purchase of an existing business that is still in its infancy 
A) an agricultural business acquisition in South-east Asia's former agricultural region 
B) the construction of an entirely new steel manufacturing subsidiary overseas 
C) a merger between a U.S.and a non-U.S.company 
D) the purchase of an existing business that is still in its infancy

Question 6

The ________ account within the United States' current account includes financial gains compensated to entities in other nations that is earned on assets they hold in the United States.

Accepted Answer

A) income receipts 
B) income payments 
C) merchandise 
D) services 
A) income receipts 
B) income payments 
C) merchandise 
D) services

Question 7

In foreign direct investment,complete ownership of a company guarantees its complete control.

Accepted Answer

A) True 
 B)False

Question 8

Not all factors of production are internationally mobile.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following accounts within the current account of the United States' balance of payments includes financial gains earned on U.S.assets held abroad?

Accepted Answer

A) income receipts account 
B) income payments account 
C) merchandise account 
D) services account 
A) income receipts account 
B) income payments account 
C) merchandise account 
D) services account

Question 10

Which of the following is used by home country governments to limit outbound foreign direct investment?

Accepted Answer

A) ownership restrictions 
B) differential tax rates 
C) tax breaks 
D) low-interest loans 
A) ownership restrictions 
B) differential tax rates 
C) tax breaks 
D) low-interest loans

Question 11

If a Japanese citizen invests in the Australian stock market,the transaction would show up on the capital account in the balance of payments of ________.

Accepted Answer

A) Japan 
B) Australia 
C) both Japan and Australia 
D) neither Japan nor Australia 
A) Japan 
B) Australia 
C) both Japan and Australia 
D) neither Japan nor Australia

Question 12

Portfolio investment is the purchase of physical assets of a company in another country to gain a degree of management control.

Accepted Answer

A) True 
 B)False

Question 13

One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

Accepted Answer

A) True 
 B)False

Question 14

The possibility that a company will create a future competitor by charging another company for access to its knowledge is a market imperfection that can encourage foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a reason behind intervention by a host country on matters related to FDI?

Accepted Answer

A) to keep their balance of payments under control 
B) to protect their outdated technology and management skills 
C) to strictly encourage the establishment of sunset industries 
D) to decrease the country's competitiveness in the global market 
A) to keep their balance of payments under control 
B) to protect their outdated technology and management skills 
C) to strictly encourage the establishment of sunset industries 
D) to decrease the country's competitiveness in the global market

Question 16

Explain the theory of market imperfections and describe the two major market imperfections.

Accepted Answer

A market that is said to operate at peak

Question 17

The soaring cost of developing subsequent stages of technology has led multinationals to engage in cross-border alliances and acquisitions.

Accepted Answer

A) True 
 B)False

Question 18

Increasing globalization is causing a growing number of international companies from emerging markets to undertake FDI.

Accepted Answer

A) True 
 B)False

Question 19

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.
-In which of the following accounts would GMI's purchase of the company in Brazil appear?

Accepted Answer

A) the current account of the United States 
B) the current account of Brazil 
C) the capital account of the Thailand 
D) the capital accounts of Brazil and the United States 
A) the current account of the United States 
B) the current account of Brazil 
C) the capital account of the Thailand 
D) the capital accounts of Brazil and the United States

Question 20

Which of the following is used by home-country governments to promote outbound foreign direct investment?

Accepted Answer

A) political pressure 
B) performance demands 
C) ownership restrictions 
D) sanctions 
A) political pressure 
B) performance demands 
C) ownership restrictions 
D) sanctions

How does the eclectic theory explain the concept of FDI? How can a host country offer incentives to attract FDI?

Exports and imports of tangible goods are included in the ________ account of a country's balance of payments.

Partnerships between a government and a host company in the context of foreign direct investment lead to ________.

Which of the following is an example of a greenfield investment?

The ________ account within the United States' current account includes financial gains compensated to entities in other nations that is earned on assets they hold in the United States.

In foreign direct investment,complete ownership of a company guarantees its complete control.

Not all factors of production are internationally mobile.

Which of the following accounts within the current account of the United States' balance of payments includes financial gains earned on U.S.assets held abroad?

Which of the following is used by home country governments to limit outbound foreign direct investment?

If a Japanese citizen invests in the Australian stock market,the transaction would show up on the capital account in the balance of payments of ________.

Portfolio investment is the purchase of physical assets of a company in another country to gain a degree of management control.

One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

The possibility that a company will create a future competitor by charging another company for access to its knowledge is a market imperfection that can encourage foreign direct investment.

Which of the following is a reason behind intervention by a host country on matters related to FDI?

Explain the theory of market imperfections and describe the two major market imperfections.

The soaring cost of developing subsequent stages of technology has led multinationals to engage in cross-border alliances and acquisitions.

Increasing globalization is causing a growing number of international companies from emerging markets to undertake FDI.

Which of the following is used by home-country governments to promote outbound foreign direct investment?

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 7: Foreign Direct Investment

How does the eclectic theory explain the concept of FDI? How can a host country offer incentives to attract FDI?

Exports and imports of tangible goods are included in the ________ account of a country's balance of payments.

Partnerships between a government and a host company in the context of foreign direct investment lead to ________.

Which of the following is an example of a greenfield investment?

The ________ account within the United States' current account includes financial gains compensated to entities in other nations that is earned on assets they hold in the United States.

In foreign direct investment,complete ownership of a company guarantees its complete control.

Not all factors of production are internationally mobile.

Which of the following accounts within the current account of the United States' balance of payments includes financial gains earned on U.S.assets held abroad?

Which of the following is used by home country governments to limit outbound foreign direct investment?

If a Japanese citizen invests in the Australian stock market,the transaction would show up on the capital account in the balance of payments of ________.

Portfolio investment is the purchase of physical assets of a company in another country to gain a degree of management control.

One reason a home country may discourage foreign direct investment outflows is to protect its "sunset" industries.

The possibility that a company will create a future competitor by charging another company for access to its knowledge is a market imperfection that can encourage foreign direct investment.

Which of the following is a reason behind intervention by a host country on matters related to FDI?

Explain the theory of market imperfections and describe the two major market imperfections.

The soaring cost of developing subsequent stages of technology has led multinationals to engage in cross-border alliances and acquisitions.

Increasing globalization is causing a growing number of international companies from emerging markets to undertake FDI.

Which of the following is used by home-country governments to promote outbound foreign direct investment?

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters