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Foreign Direct Investment
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Global Business Today Study Set 7

Business

Quiz 8 :
Foreign Direct Investment

Quiz 8 :
Foreign Direct Investment

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When a firm exports its products to a foreign country, foreign direct investment occurs.
Free
True False
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Answer:

False

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The flow of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time.
Free
True False
Answer:

Answer:

False

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The globalization of the world economy is having a negative effect on the volume of FDI.
Free
True False
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Answer:

False

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Historically, most FDI has been directed at the developed nations of the world.
True False
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Mergers and acquisitions take longer to execute than a greenfield investment.
True False
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The process of exporting grants a foreign entity the right to produce and sell a firm's product.
True False
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The attractiveness of exporting is reduced when a product can easily be produced in almost any location.
True False
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According to internalization theory, one drawback of licensing is that it might result in a firm giving away technological know-how to a competitor.
True False
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There are at least 30 firms that control 70 percent of the computer printer business in Europe. This is an example of an oligopoly.
True False
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The eclectic paradigm is based on the idea that intellectual property is of considerable importance in explaining the direction of FDI.
True False
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According to the free market view, countries should specialize in the production of those goods and services that they can produce most efficiently.
True False
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A country that follows the pragmatic nationalist view would agree that FDI can benefit a host country through capital, skills, and jobs but these come at a cost.
True False
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In terms of employment, the indirect effects of FDI are often as large as, if not larger than, the direct effects.
True False
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FDI can result in a positive contribution to a host economy by supplying capital and technology which boost the country's economy.
True False
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An acquisition does not result in a net increase in the number of players in a market.
True False
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Offshore production refers to FDI undertaken to serve the host market.
True False
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Many investor nations now have government-backed insurance programs to cover major types of foreign investment risk like the risks of expropriation (nationalization), war losses, and the inability to transfer profits back home.
True False
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Historically, countries have occasionally manipulated the tax rules as a way to encourage domestic companies to invest at home.
True False
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Performance requirements are controls over the behavior of the MNE's local subsidiary.
True False
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The United Nations was the first multinational institution to govern FDI beginning in the 1930s.
True False
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