Question 1

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 2

Discuss the reasons for the growth in FDI over the last 30 years.

Accepted Answer

FDI has grown more rapidly than world tr

Question 3

Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE.

Accepted Answer

A) True 
 B)False

Question 4

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

Accepted Answer

A) True 
 B)False

Question 5

The stock of FDI is:

Accepted Answer

A)  the amount of FDI undertaken over a given period of time. 
B)  the total accumulated value of foreign-owned assets at a given time. 
C)  the flow of FDI out of a country. 
D)  the amount of foreign direct investment made by domestic companies over a given period of time. 
A)  the amount of FDI undertaken over a given period of time. 
B)  the total accumulated value of foreign-owned assets at a given time. 
C)  the flow of FDI out of a country. 
D)  the amount of foreign direct investment made by domestic companies over a given period of time.

Question 6

How does the free market view support FDI?

Accepted Answer

The intellectual case for the free marke

Question 7

What is double taxation in the context of FDI?

Accepted Answer

A)  Taxation at twice the normal rate for foreign companies 
B)  Taxing the producers as well as suppliers 
C)  Taxation of income in both home and host country 
D)  Taxation of both income as well as dividends paid 
A)  Taxation at twice the normal rate for foreign companies 
B)  Taxing the producers as well as suppliers 
C)  Taxation of income in both home and host country 
D)  Taxation of both income as well as dividends paid

Question 8

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 9

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 10

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

Accepted Answer

A)  Imperialist 
B)  Conservative 
C)  Free market 
D)  Radical 
A)  Imperialist 
B)  Conservative 
C)  Free market 
D)  Radical

Question 11

According to the _____ view of FDI,MNEs extract profits from the host country and take them to their home country,giving nothing of value to the host country in exchange.

Accepted Answer

A)  imperialist 
B)  conservative 
C)  free market 
D)  radical 
A)  imperialist 
B)  conservative 
C)  free market 
D)  radical

Question 12

Which of the following observations concerning Knickerbocker's theory is true?

Accepted Answer

A)  It does not explain imitative FDI behavior by firms in oligopolistic industries. 
B)  Economists favor this theory as an explanation for FDI compared to the internalization theory. 
C)  It addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. 
D)  It does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license. 
A)  It does not explain imitative FDI behavior by firms in oligopolistic industries. 
B)  Economists favor this theory as an explanation for FDI compared to the internalization theory. 
C)  It addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. 
D)  It does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license.

Question 13

Research supports the view that multinational firms often transfer significant technology when they invest in a foreign country.

Accepted Answer

A) True 
 B)False

Question 14

The free market view argues that FDI is a benefit to both the source country and to the host country.

Accepted Answer

A) True 
 B)False

Question 15

John Dunning pioneered the eclectic paradigm.

Accepted Answer

A) True 
 B)False

Question 16

Discuss the pragmatic nationalist view toward FDI.

Accepted Answer

The pragmatic nationalist view is that F

Question 17

Which of the following primarily explains why developing nations are characterized by lower percentage of cross-border mergers and acquisitions compared to developed nations?

Accepted Answer

A)  Fewer target firms to acquire in developing nations 
B)  Fierce opposition to mergers and acquisitions in developed nations 
C)  Unwillingness of foreign companies to invest in developing nations 
D)  Presence of import quotas in developing nations 
A)  Fewer target firms to acquire in developing nations 
B)  Fierce opposition to mergers and acquisitions in developed nations 
C)  Unwillingness of foreign companies to invest in developing nations 
D)  Presence of import quotas in developing nations

Question 18

_____ arises when two or more enterprises encounter each other in different regional markets,national markets,or industries.

Accepted Answer

A)  Horizontal integration 
B)  Multipoint competition 
C)  An oligopoly 
D)  Vertical integration 
A)  Horizontal integration 
B)  Multipoint competition 
C)  An oligopoly 
D)  Vertical integration

Question 19

How can FDI undertaken to serve the home market stimulate economic growth in the home country?

Accepted Answer

A)  By freeing home-country resources to concentrate on activities where the home country has a comparative advantage 
B)  By importing more goods and services than it is exporting 
C)  By circumventing trade barriers that may have prevented direct exports in the past 
D)  By reducing demand for home-country exports of capital equipment,intermediate goods,and complementary products 
A)  By freeing home-country resources to concentrate on activities where the home country has a comparative advantage 
B)  By importing more goods and services than it is exporting 
C)  By circumventing trade barriers that may have prevented direct exports in the past 
D)  By reducing demand for home-country exports of capital equipment,intermediate goods,and complementary products

Question 20

FDI undertaken to serve the home market is known as:

Accepted Answer

A)  outsourcing. 
B)  FDI substitution. 
C)  offshore production. 
D)  home market FDI. 
A)  outsourcing. 
B)  FDI substitution. 
C)  offshore production. 
D)  home market FDI.

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

Discuss the reasons for the growth in FDI over the last 30 years.

Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE.

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

The stock of FDI is:

How does the free market view support FDI?

What is double taxation in the context of FDI?

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

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.

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

According to the _____ view of FDI,MNEs extract profits from the host country and take them to their home country,giving nothing of value to the host country in exchange.

Which of the following observations concerning Knickerbocker's theory is true?

Research supports the view that multinational firms often transfer significant technology when they invest in a foreign country.

The free market view argues that FDI is a benefit to both the source country and to the host country.

John Dunning pioneered the eclectic paradigm.

Discuss the pragmatic nationalist view toward FDI.

Which of the following primarily explains why developing nations are characterized by lower percentage of cross-border mergers and acquisitions compared to developed nations?

_____ arises when two or more enterprises encounter each other in different regional markets,national markets,or industries.

How can FDI undertaken to serve the home market stimulate economic growth in the home country?

FDI undertaken to serve the home market is known as:

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Regional Economic Integration

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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 8: Foreign Direct Investment

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

Discuss the reasons for the growth in FDI over the last 30 years.

Direct effects of FDI arise when jobs are created in local suppliers as a result of the FDI and when jobs are created because of increased local spending by employees of the MNE.

As transportation costs or trade barriers increase,exporting becomes unprofitable,compared to FDI and licensing.

The stock of FDI is:

How does the free market view support FDI?

What is double taxation in the context of FDI?

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

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.

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

According to the _____ view of FDI,MNEs extract profits from the host country and take them to their home country,giving nothing of value to the host country in exchange.

Which of the following observations concerning Knickerbocker's theory is true?

Research supports the view that multinational firms often transfer significant technology when they invest in a foreign country.

The free market view argues that FDI is a benefit to both the source country and to the host country.

John Dunning pioneered the eclectic paradigm.

Discuss the pragmatic nationalist view toward FDI.

Which of the following primarily explains why developing nations are characterized by lower percentage of cross-border mergers and acquisitions compared to developed nations?

_____ arises when two or more enterprises encounter each other in different regional markets,national markets,or industries.

How can FDI undertaken to serve the home market stimulate economic growth in the home country?

FDI undertaken to serve the home market is known as:

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Regional Economic Integration

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, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters