QUESTION The United States has been an attractive target for FDI partly because of its: A. abundance of cheap and skilled labor. B. stable and dynamic economy. C. commitment to environmental issues. D. low corporate tax rates. E. high trade barriers. ANSWER B
Date: September 3rd, 2020
QUESTION The strategic behavior theory: A. explains the constraints of exporting and licensing. B. seeks to explain the challenges faced by a firm during the establishment of a new operation in a foreign country. C. seeks to explain the patterns of FDI flows based on the idea that FDI flows are a reflection of strategic […]
Date: September 3rd, 2020
QUESTION Which of the following is true regarding the inflow of FDI? A. Even though developing nations still account for the largest share of FDI inflows, FDI into developed nations has increased markedly. B. Africa has historically been the largest recipient of inward FDI. C. The United Kingdom and France have historically been the smallest […]
Date: September 3rd, 2020
QUESTION Which of the following involves producing goods at home and then shipping them to the receiving country for sale? A. Outsourcing B. Licensing C. Franchising D. Exporting E. Diversifying ANSWER D
Date: September 3rd, 2020
QUESTION Which of the following 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? A. Strategic trade policy B. Integration approach C. Scramble theory D. Eclectic paradigm E. […]
Date: September 3rd, 2020
QUESTION FDI is risky because of the problems associated with: A. sharing a valuable technological know-how with a potential competitor. B. an increase in transportation costs, especially for those products that have a low value-to-weight ratio. C. doing business in a different culture where the rules of the game may be very different. D. the […]
Date: September 3rd, 2020
QUESTION 3M, an American firm, manufactures adhesive tapes in St. Paul, Minnesota, and ships the tapes to South Korea for sale. According to this information, which of the following is being done by 3M? A. Exporting B. Licensing C. Franchising D. Insourcing E. Outsourcing ANSWER A
Date: September 3rd, 2020
QUESTION Which of the following involves granting a foreign entity the right to produce and sell the firm’s product in return for a royalty fee on every unit sold? A. Outsourcing B. Exporting C. Licensing D. Diverging E. Hedging ANSWER C
Date: September 3rd, 2020
QUESTION Which of the following is one of the limitations of exporting that leads companies to prefer FDI over exporting? A. The presence or threat of trade barriers B. The costs of acquiring a foreign enterprise C. The costs of establishing production facilities in a foreign country D. The risk of giving away valuable technological […]
Date: September 3rd, 2020
QUESTION Which of the following products has a low value-to-weight ratio? A. Electronic components B. Personal computers C. Medical equipment D. Computer software E. Cement ANSWER E
Date: September 3rd, 2020
