Question 1

Which of the following arises when a country is exporting more goods and services than it is importing?

Accepted Answer

A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance 
A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance

Question 2

The WTO supports the promotion of international trade in services.

Accepted Answer

A) True 
 B)False

Question 3

What are the major drawbacks of licensing according to the internalization theory?

Accepted Answer

According to the internalization theory,

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Explain John Dunning's position on FDI.What is the eclectic paradigm?

Accepted Answer

John Dunning argued that to fully unders

Question 6

The _____ suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.

Accepted Answer

A)  product life-cycle theory 
B)  internalization theory 
C)  multipoint competition theory 
D)  eclectic paradigm 
A)  product life-cycle theory 
B)  internalization theory 
C)  multipoint competition theory 
D)  eclectic paradigm

Question 7

By placing tariffs on imported goods,governments can increase the cost of exporting relative to foreign direct investment and licensing.

Accepted Answer

A) True 
 B)False

Question 8

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

Accepted Answer

A)  Internalization theory 
B)  Product life-cycle theory 
C)  Perfect markets theory 
D)  Random walk theory 
A)  Internalization theory 
B)  Product life-cycle theory 
C)  Perfect markets theory 
D)  Random walk theory

Question 9

Discuss the pragmatic nationalist view toward FDI.

Accepted Answer

The pragmatic nationalist view is that F

Question 10

The radical view traces its roots to Marxist political and economic theory.

Accepted Answer

A) True 
 B)False

Question 11

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 12

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

Accepted Answer

A)  When the firm has know-how that can be adequately protected by a licensing contract 
B)  When the firm produces products that have a low value-to-weight ratio 
C)  When a firm's skills and know-how are amenable to licensing 
D)  When the firm needs tight control over a foreign entity 
A)  When the firm has know-how that can be adequately protected by a licensing contract 
B)  When the firm produces products that have a low value-to-weight ratio 
C)  When a firm's skills and know-how are amenable to licensing 
D)  When the firm needs tight control over a foreign entity

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A country's _____ keeps 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

Question 15

Developing nations currently account for the largest share of FDI inflows.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following situations would FDI improve the current account of the host country's balance of payments?

Accepted Answer

A)  If the foreign subsidiary imports a substantial number of its inputs from abroad 
B)  If the FDI reduces existing employment opportunities 
C)  If the FDI is a substitute for imports of goods or services 
D)  If the FDI results in substitution of products produced domestically 
A)  If the foreign subsidiary imports a substantial number of its inputs from abroad 
B)  If the FDI reduces existing employment opportunities 
C)  If the FDI is a substitute for imports of goods or services 
D)  If the FDI results in substitution of products produced domestically

Question 17

The largest source country for FDI has been China.

Accepted Answer

A) True 
 B)False

Question 18

A Japanese car manufacturer acquires an Italian producer of car tires.This is an example of a greenfield investment.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following arises when a country is importing more goods and services than it is exporting?

Accepted Answer

A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance 
A)  Current account surplus 
B)  Trade deficit 
C)  Trade surplus 
D)  Trade balance

Question 20

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Accepted Answer

Products with low value-to-weight ratios

Which of the following arises when a country is exporting more goods and services than it is importing?

The WTO supports the promotion of international trade in services.

What are the major drawbacks of licensing according to the internalization theory?

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

Explain John Dunning's position on FDI.What is the eclectic paradigm?

The _____ suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.

By placing tariffs on imported goods,governments can increase the cost of exporting relative to foreign direct investment and licensing.

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

Discuss the pragmatic nationalist view toward FDI.

The radical view traces its roots to Marxist political and economic theory.

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.

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

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

A country's _____ keeps track of its payments to and its receipts from other countries.

Developing nations currently account for the largest share of FDI inflows.

In which of the following situations would FDI improve the current account of the host country's balance of payments?

The largest source country for FDI has been China.

A Japanese car manufacturer acquires an Italian producer of car tires.This is an example of a greenfield investment.

Which of the following arises when a country is importing more goods and services than it is exporting?

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 Rd

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

Which of the following arises when a country is exporting more goods and services than it is importing?

The WTO supports the promotion of international trade in services.

What are the major drawbacks of licensing according to the internalization theory?

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

Explain John Dunning's position on FDI.What is the eclectic paradigm?

The _____ suggests that a firm will establish production facilities where foreign assets or resource endowments that are important to the firm are located.

By placing tariffs on imported goods,governments can increase the cost of exporting relative to foreign direct investment and licensing.

Identify the theory that seeks to explain why firms often prefer foreign direct investment over licensing as a strategy for entering foreign markets.

Discuss the pragmatic nationalist view toward FDI.

The radical view traces its roots to Marxist political and economic theory.

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.

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

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

A country's _____ keeps track of its payments to and its receipts from other countries.

Developing nations currently account for the largest share of FDI inflows.

In which of the following situations would FDI improve the current account of the host country's balance of payments?

The largest source country for FDI has been China.

A Japanese car manufacturer acquires an Italian producer of car tires.This is an example of a greenfield investment.

Which of the following arises when a country is importing more goods and services than it is exporting?

Discuss why firms selling products with low value-to-weight ratios choose FDI over exporting.

Globalization

National Differences in Political Economy, 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 Trade Pacts Give the Mexican Auto Industry an Edge

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 Rd

Global Human Resource Management

Accounting and Finance in the International Business

Filters