Exam 8: Foreign Direct Investment

An aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by,for example,offering subsidies to foreign MNEs in the form of tax breaks or grants.

Which of the following is the prime reason why Africa has attracted FDI in recent years?

What is double taxation in the context of FDI?

The two most common methods of restricting inward FDI are ownership restraints and performance requirements.

Discuss the two main forms of FDI.

If the FDI is a substitute for imports of goods or services,the effect can be to improve the current account of the host country's balance of payments.

Which of the following is a way in which governments increase the attractiveness of FDI and licensing relative to exporting?

Why do many economists favor internalization theory as an explanation for FDI compared to Knickerbocker's theory?

What are the possible adverse effects of FDI on a host country's balance-of-payments position?

FDI does not benefit the host country's balance of payments if the foreign subsidiary creates demand for home-country exports of capital equipment,intermediate goods,or complementary products.

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

Advantages that arise from using resource endowments or assets that are tied to a particular place and that a firm finds valuable to combine with its own unique assets are known as:

Governments normally are concerned when their country is running a surplus on the current account of their balance of payments.

Which of the following specifically reduces the viability of an exporting strategy specifically for products with low value-to-weight ratios?

When transportation costs are added to production costs,it becomes unprofitable to ship some products over a large distance.This is particularly true of products that have a high value-to-weight ratio.

The stock of FDI is:

Which view of FDI traces its roots to classical economics and the international trade theories of Adam Smith and David Ricardo?

How does the free market view support FDI?

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

The amount of FDI undertaken over a given time period is known as the flow of FDI.