CHAPTER 7 Self Quiz

Multiple Choice 1 points

Question Foreign direct investment takes place when a firm directly
invests cash or physical facilities to produce or market a product in a
country outside of its home market.
Answer True
False
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Multiple Choice 1 points
Question A multinational enterprise is any company that is engaged
in FDI.
Answer True
False
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Question Many outside firms wanting to do usiness in !hina are
cogni"ant of some prolems ut #uite confident they can e
overcome with guanxiwang or outright emoluments.
Answer True
False
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Multiple Choice 1 points
Question The $nited %tates has een the largest source for FDI
from immediately after &&II until present'day.
Answer True
False
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Question (y the )***s most FDIs were concentrated in industry and
agriculture to meet world'wide demand for these sectors.
Answer True
False
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Question +,porting is the sale of products produced in one country
to residents of another country.
Answer True
False
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Multiple Choice 1 points
Question Internali"ation Theory stresses licensing over FDI as a
sound way to have -first mover advantage- cheaply in new host
market economies.
Answer True
False
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Question .icensing is access to a head'#uartered company/s
competitive advantages in management0 product or service lines0
and capailities in e,change for premiums and1or market presence.
Answer True
False
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Multiple Choice 1 points
Question F.T. 2nickerocker created a theory of oligopolistic firm
ehaviors wherey the ma3or players are interdependent on one
another to enhance mutual success at competitors/ e,pense.
Answer True
False
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Question 4ragmatic nationalism takes the free market view towards
FDI.
Answer True
False
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Multiple Choice 1 points
Question Hill says that the shift to a service'ased economy is
driven y several factors5 which of these is not one of them6
Answer shift away from manufacturing
shift away from production to consumption
shift away from value creation
shift away from lierali"ation
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Multiple Choice 1 points
Question !hina is asoring FDI like a -sponge- from investor
nations eager to fuel and enefit from its annual real growth rate.
&hy do investors choose to engage in FDI rather than e,porting to
!hina7
Answer !hina has a highly regulated usiness environment.
!hina has high import tariffs.
(oth A and (.
8either A nor (.
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Question FDI as a greenfield investment has the most significant
positive effect on a host country/s 9999999999999996
Answer alance'of'payments.
national autonomy.
employment levels.
stock market.
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Question 2nickerocker/s theory of foreign direct investment is
ased on 99996
Answer strategic managing.
strategic planning.
strategic rivalry.
strategic partnering.
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Question &hen two or more enterprises run into each other in
different regional markets0 national markets0 industries0 this is called
999999996
Answer factor'ased competition.
an e,ternality.
multipoint competition.
oligopolic competition.
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Multiple Choice 1 points
Question .ocation'specific advantages are 9999 from a particular
foreign location to comine with a firm/s own uni#ue assets6
Answer advantages arising out of government support
advantages arising out of resource endowments
advantages arising out of investment outlays
advantages arising out of local market opportunities
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Multiple Choice 1 points
Question &hat economist is most responsile for the view regarding
multinational enterprises as inimical to domestic usinesses and
consumers6
Answer :ohn Dunning.
Adam %mith.
;aymong <ernon.
2arl Mar,.
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Question &hen D4 &orld purchased 4=>0 the (ush Administration6
Answer applauded this ac#uisition as an important American
deal.
resented that an American company lost in the idding.
worked with the %tate Department to ensure its success.
fought with !ongress and lost over security concerns.
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Multiple Choice 1 points
Question FDI as a sustitute for imports or goods and services does
one of the following6
Answer improves the current account of the host country/s
alance of payments.
increases the current account of the home country/s
trade deficits.
reduces the need to finance a current account in
arrears.
supports sagging e,port returns when investment costs
uild.
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Multiple Choice 1 points
Question ;estricting outward FDI y nearly all investor countries
occurs ecause of concerns stemming from 99999999996
Answer capital outflows in a time of rising ta,es at home.
capital increases at a time with emerging inflation.
the current position of the country/s alance of
payments.
investor 3itters over the country/s trade deficits.