QUESTION According to the free market view, how does FDI increase the efficiency of the world economy through MNEs? A. The MNE is an instrument for dispersing the production of goods and services to the most efficient locations around the globe. B. MNEs extract profits from the host country and take them to their home […]
QUESTION Which of the following is the only way to support a current account deficit in the long run? 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 exchange […]
QUESTION Which of the following statements regarding the free market view is true? A. According to the free market view, MNEs decrease the overall efficiency of the world economy. B. The free market view argues that FDI is a benefit to both the source country and the host country. C. According to the free market […]
QUESTION The most important concerns regarding the costs of FDI for the home country center on the: A. balance-of-payments and employment effects of outward FDI. B. technology capture effect and the perceived loss of national sovereignty. C. reverse-resource transfer effect and the exposure to foreign markets caused by FDI. D. import of substantial input from […]
QUESTION The pragmatic nationalist view is that: 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 […]
QUESTION According to which of the following, FDI has both benefits and costs and should be allowed only if the benefits outweigh the costs? A. Eclectic paradigm theory B. Free market view C. Pragmatic nationalist view D. Radical view E. Internalization theory ANSWER C
QUESTION The tendency to aggressively court FDI believed to be in the national interest of a country is an aspect of: A. pragmatic nationalism. B. the radical view. C. nationalism. D. imitative theory. E. eclectic paradigm. ANSWER A
QUESTION Which of the following is true regarding the pragmatic nationalist view of FDI? A. One 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. B. The pragmatic nationalist view […]
QUESTION Many host countries are concerned that a foreign-owned manufacturing plant may import many components from its home country, which has negative implications for the host country’s: A. free trade agreements. B. inward FDI. C. sovereignty. D. balance-of-payments position. E. gold reserves. ANSWER D
QUESTION Direct effects of FDI on employment in the host country arise when a foreign MNE: A. brings in managers trained in the latest management techniques from the home country. B. creates jobs because of increased local spending by employees of the MNE. C. employs a number of host country citizens. D. causes local suppliers […]
