Question 1

The indirect employment effects of FDI are often as large as,if not larger than,the direct effects.

Accepted Answer

A) True 
 B)False

Question 2

A firm's bargaining power is low when the host government places a low value on what the firm has to offer.

Accepted Answer

A) True 
 B)False

Question 3

The pragmatic nationalist view is that :

Accepted Answer

A)   FDI benefits only the host country.
B)   FDI does not make any positive contribution to the host economy.
C)   every country should adopt the free market view.
D)   FDI should not be allowed by any country as it is an instrument of economic domination rather than economic development.
E)   FDI has both benefits and costs.F) A) and E)
G) A) and D)

Question 4

A firm is most likely to favor foreign direct investment over exporting when:

Accepted Answer

A)   the firm wants its technological know-how to be widely disseminated.
B)   the firm wishes to maintain control over its operations and business strategy.
C)   the transportation costs are low.
D)   there are no trade barriers.
E)   the firm wants to customize its products as per the tastes and preferences of foreign consumers.F) B) and C)
G) C) and D)

Question 5

Which of the following is the only way in which a current account deficit can be supported in the long run?

Accepted Answer

A)   Borrowing from the IMF
B)   Selling assets to foreigners
C)   Divesting stock in domestic corporations
D)   Purchasing stocks, bonds, and real estate in other countries
E)   Issuing negotiable instruments like the bills of exchangeF) B) and E)
G) B) and C)

Question 6

People with radical view toward FDI argue that _____ is an instrument of imperialist domination.

Accepted Answer

A)   privatization
B)   a multinational enterprise
C)   nationalization
D)   a publicly traded company
E)   outsourcingF) A) and D)
G) A) and C)

Question 7

A critical competitive feature of an oligopoly is:

Accepted Answer

A)   the lack of interaction among the major players.
B)   the presence of a domestic market which is open for foreign firms.
C)   the desire of all the major players to avoid the phenomenon of diminishing returns.
D)   the interdependence of the major players.
E)   the lack of imitative behavior among the major players.F) A) and B)
G) B) and E)

Question 8

The stock of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time.

Accepted Answer

A) True 
 B)False

Question 9

The _____ states that combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI and it also requires the firm to establish production facilities where those foreign assets or resource endowments are located.

Accepted Answer

A)   strategic trade policy
B)   integration approach
C)   scramble theory
D)   eclectic paradigm
E)   infant industry argumentF) B) and D)
G) All of the above

Question 10

During 1998 to 2010,which of the following countries had the highest FDI outflow?

Accepted Answer

A)   United Kingdom
B)   United States
C)   Netherlands
D)   Germany
E)   JapanF) A) and C)
G) All of the above

Question 11

Which of the following indicates that a firm has full outright stake in an acquisition?

Accepted Answer

A)   Anderson Corporations acquires at least 75 percent of a company.
B)   Sheffield Enterprises acquires at least 60 percent of a company.
C)   Arthur Enterprises acquires 98 percent of a company.
D)   Maximus Corporations acquires 100 percent of a company.
E)   Dream Animax acquires atleast 85 percent of a company.F) A) and D)
G) A) and E)

Question 12

Dunning's theory helps explain:

Accepted Answer

A)   how firms try to match each other's moves in different markets to try to hold each other in check.
B)   the interdependence between firms in an oligopoly that leads to imitative behavior among the rivals.
C)   why a greenfield investment in a new facility is better than an acquisition of or a merger with an existing local firm.
D)   the problems associated with doing business in a different culture where the rules of the game may be very different.
E)   how location factors affect the direction of FDI.F) A) and E)
G) B) and D)

Question 13

Under what circumstances,will a firm favor foreign direct investment over exporting as an entry strategy?

Accepted Answer

A firm will favor foreign direct investm...

Question 14

By limiting imports through quotas,governments reduce the attractiveness of FDI and licensing.

Accepted Answer

A) True 
 B)False

Question 15

A current account deficit is also known as a(n) _____ deficit.

Accepted Answer

A)   stock
B)   inventory
C)   external
D)   tariff
E)   tradeF) B) and E)
G) A) and C)

Exam 8: Foreign Direct Investment

During 1998 to 2010,which of the following countries had the highest FDI outflow?

Correct Answer
verified

A current account deficit is also known as a(n) _____ deficit.

Correct Answer
verified

A firm's bargaining power is low when the host government places a low value on what the firm has to offer.

Correct Answer
verified

The stock of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time.

Correct Answer
verified

A firm is most likely to favor foreign direct investment over exporting when:

Correct Answer
verified

The _____ states that combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI and it also requires the firm to establish production facilities where those foreign assets or resource endowments are located.

Correct Answer
verified

The pragmatic nationalist view is that :

Correct Answer
verified

By limiting imports through quotas,governments reduce the attractiveness of FDI and licensing.

Correct Answer
verified

Under what circumstances,will a firm favor foreign direct investment over exporting as an entry strategy?

Correct Answer
verified
A firm will favor foreign direct investm...
View Answer

The indirect employment effects of FDI are often as large as,if not larger than,the direct effects.

Correct Answer
verified

A critical competitive feature of an oligopoly is:

Correct Answer
verified

Which of the following indicates that a firm has full outright stake in an acquisition?

Correct Answer
verified

People with radical view toward FDI argue that _____ is an instrument of imperialist domination.

Correct Answer
verified

Dunning's theory helps explain:

Correct Answer
verified

Which of the following is the only way in which a current account deficit can be supported in the long run?

Correct Answer
verified

Exam 8: Foreign Direct Investment

During 1998 to 2010,which of the following countries had the highest FDI outflow?

Correct AnswerverifiedShow Answer

A current account deficit is also known as a(n) _____ deficit.

Correct AnswerverifiedShow Answer

A firm's bargaining power is low when the host government places a low value on what the firm has to offer.

Correct AnswerverifiedShow Answer

The stock of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time.

Correct AnswerverifiedShow Answer

A firm is most likely to favor foreign direct investment over exporting when:

Correct AnswerverifiedShow Answer

The _____ states that combining location-specific assets or resource endowments and the firm's own unique assets often requires FDI and it also requires the firm to establish production facilities where those foreign assets or resource endowments are located.

Correct AnswerverifiedShow Answer

The pragmatic nationalist view is that :

Correct AnswerverifiedShow Answer

By limiting imports through quotas,governments reduce the attractiveness of FDI and licensing.

Correct AnswerverifiedShow Answer

Under what circumstances,will a firm favor foreign direct investment over exporting as an entry strategy?

Correct AnswerverifiedA firm will favor foreign direct investm...View AnswerShow Answer

The indirect employment effects of FDI are often as large as,if not larger than,the direct effects.

Correct AnswerverifiedShow Answer

A critical competitive feature of an oligopoly is:

Correct AnswerverifiedShow Answer

Which of the following indicates that a firm has full outright stake in an acquisition?

Correct AnswerverifiedShow Answer

People with radical view toward FDI argue that _____ is an instrument of imperialist domination.

Correct AnswerverifiedShow Answer

Dunning's theory helps explain:

Correct AnswerverifiedShow Answer

Which of the following is the only way in which a current account deficit can be supported in the long run?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A firm will favor foreign direct investm...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified