QUESTION Foreign managers trained in the latest management techniques can often help to improve the efficiency of operations in the host country, whether those operations are acquired or greenfield developments. This benefit of FDI falls into the category of: A. employment effects. B. balance-of-payments effects. C. effects on competition. D. resource transfer effects. E. autonomy […]
QUESTION Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host country? A. It decreases the level of competition in the host country. B. It tends to increase the prices of the products. C. It leads to a high rate of unemployment in the long […]
QUESTION The main benefits of inward FDI for a host country arise from: A. the resource-transfer effect, the employment effect, and the balance-of-payments effect. B. the labor-transfer effect, the technology effect, and the currency-exchange effect. C. the cultural awareness effect, first-mover advantage effect, and economic development effect. D. the foreign exchange reserves effect, knowledge flow […]
QUESTION Indirect effects of FDI on employment in a host country arise when: A. a foreign MNE employs a number of host-country citizens. B. jobs are created because of increased local spending by employees of an MNE. C. an MNE brings in managers from the home country for its operations in the host country. D. […]
QUESTION Which account in the balance of payments records transactions involving the export and import of goods and services? A. Current B. Foreign C. Internal D. Tariff E. Savings ANSWER A
QUESTION Which of the following are national accounts that track both payments to and receipts from other countries? A. Equity B. Dematerialized C. Balance of trade D. Asset E. Balance-of-payments ANSWER E
QUESTION A current account deficit is also known as a(n): A. stock deficit. B. inventory deficit. C. external deficit. D. tariff deficit. E. trade deficit. ANSWER E
QUESTION Which of the following is most likely to be the effect of FDI in the form of a greenfield investment on the host country? A. It drives down prices and increases the economic welfare of consumers. B. It raises unemployment levels. C. It causes firms to fight for scarce capital investments. D. It leads […]
QUESTION The cement market in Erbia is dominated by four firms. These firms control 85 percent of selling and buying of the domestic market. Which of the following terms explains the market structure of the cement industry in Erbia? A. Perfect competition B. Monopoly C. Oligopoly D. Dual monopoly E. Monopsony ANSWER C
QUESTION Which view argues that international production should be distributed among countries according to the theory of comparative advantage? A. Conservative B. Pragmatic nationalism C. Free market D. Radical E. Keynesian economic ANSWER C
