Exam 8: Foreign Direct Investment

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 possibility of an increase in trade barriers such as import tariffs or quotas.
E) increased production costs.

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A) multilateral investment
B) foreign direct investment
C) reciprocal foreign investment
D) international divestment
E) asset divestment

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A) eclectic paradigm theory
B) free market view
C) pragmatic nationalist view
D) radical view
E) internalization theory

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A) the disadvantages associated with the adoption of a completely free market view.
B) why different nations import goods from other countries even when they are more capable of producing them efficiently.
C) the preference for FDI over licensing by firms as a strategy to enter foreign markets.
D) the benefits of exercising protectionism coupled with partial adoption of free market approach.
E) the pattern of sale of products from one country to another.

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A) employment effects.
B) balance-of-payments effects.
C) effects on competition.
D) resource transfer effects.
E) autonomy effects.

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A) multilateral investment
B) foreign direct investment
C) reciprocal foreign investment
D) international divestment
E) asset divestment

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A) FDI.
B) importing.
C) franchising.
D) outsourcing.
E) licensing.

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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 development.
E) FDI has both benefits and costs.

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Foreign direct investment (FDI)occurs wh...

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Firms for which licensing is not a good ...

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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 view,MNEs can never be instruments of economic development,only of economic domination.
D) According to the free market view,FDI is beneficial to the host country of an MNE but it is harmful for the home country of the MNE.
E) The free market view traces its roots to Marxist political and economic theory.

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A) trade surplus.
B) current account deficit.
C) positive balance of payment.
D) economic recession.
E) net capital inflow.

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A) QFresh and Fast Fizz will reduce the prices of their respective drinks.
B) Fast Fizz will launch another new drink.
C) QFresh will link up with Ignite to launch a completely new product.
D) Fast Fizz and Ignite will collaborate against QFresh.
E) QFresh will have an increased domestic consumption.

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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 effect,and the reverse resource transfer effect.
E) the employment effect,the labor-transfer effect,and the technology effect.

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