QUESTION Services such as telecommunications, retailing, and many financial services, where the service has to be produced where it is delivered, lend themselves well to exporting. Indicate whether the statement is true or false. ANSWER FALSE FDI’s impact on competition in domestic markets may be particularly important in the case of services, such as […]
QUESTION According to the U.S. Department of Commerce, which of the following, occurs whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent or more in a foreign business entity? A. Multilateral investment B. Foreign direct investment C. Reciprocal foreign investment D. International divestment E. Asset divestment ANSWER B
QUESTION An acquisition does not result in a net increase in the number of players in a market. Indicate whether the statement is true or false. ANSWER TRUE An acquisition does not result in a net increase in the number of players in a market; the effect on competition may be neutral. When a […]
QUESTION Which of the following refers to the amount of FDI undertaken over a given period (normally a year)? A. Portfolio B. Flow C. Status D. Stock E. Fragment ANSWER B
QUESTION The indirect employment effects of FDI are often as large as, if not larger than, the direct effects. Indicate whether the statement is true or false. ANSWER TRUE The effects of FDI on employment are both direct and indirect. Direct effects arise when a foreign MNE employs a number of host-country citizens. Indirect […]
QUESTION The stock of foreign direct investment refers to: A. the total accumulated value of foreign-owned assets at a given time. B. the number of shares of a foreign firm held by the local investors. C. the amount of FDI undertaken over a given time period (normally a year). D. the dividend amount paid by […]
QUESTION Offshore production refers to FDI undertaken to serve the host market. Indicate whether the statement is true or false. ANSWER FALSE International trade theory tells us that home-country concerns about the negative economic effects of offshore production may be misplaced. The term offshore production refers to FDI undertaken to serve the home market.
QUESTION Why has FDI grown more rapidly than world trade? A. The decline in trade barriers has erased the fear of protectionist pressures. B. Executives of business firms see FDI as a way of circumventing future trade barriers. C. There has been a general shift toward radical and totalitarian political institutions. D. Privatization has made […]
QUESTION Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in 2001? A. Reducing barriers to cross-border investment B. Phasing out subsidies to agricultural producers C. Limiting the use of antidumping laws D. Attempts to tie trade to labor standards in a country E. Cutting […]
QUESTION The threat of antidumping action: A. helps the firm raise capital in the primary market. B. limits the ability of a firm to raise prices in response to high demand. C. enhances the firm’s ability to disperse its productive activities in an efficient manner. D. limits the ability of a firm to use aggressive […]
