QUESTION When a country is importing more goods and services than it is exporting, it is incurring a(n): A. trade surplus. B. current account deficit. C. positive balance of payment. D. economic recession. E. net capital inflow. ANSWER B
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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
Date: September 3rd, 2020
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
Date: September 3rd, 2020
QUESTION The difference between Internalization theory and imitative theory is that: A. internalization theory does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license. B. imitative theory addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. C. most […]
Date: September 3rd, 2020
QUESTION Location-specific advantages for a firm are those that arise from: A. acquiring the home markets of foreign firms that threaten a firm’s domestic market. B. gaining a commanding position in one market and using them to subsidize competitive attacks in other markets. C. preferring exporting over licensing in order to retain control over know-how, […]
Date: September 3rd, 2020
