Question 1

During the past decade,U.S.imports of business services have ________,U.S.exports of business services have ________,and U.S.net exports of business services have ________.

Accepted Answer

According to the information given in the sentence, U.S. imports of business services have increased, U.S. exports of business services have also increased, and U.S. net exports of business services have increased.

Question 2

Foreign outsourcing is

Accepted Answer

Foreign outsourcing refers to the transfer of operations to foreign contractors or third-party service providers. It is a common practice among companies looking to reduce costs and improve efficiency by taking advantage of cheaper labor and resources available in foreign countries.

Question 3

Product differentiation and internal economies of scale yield gains from trade in the form of

Accepted Answer

Product differentiation and internal economies of scale allow for firms to produce goods at a lower cost, which can be passed on to consumers in the form of lower prices. Additionally, these factors allow firms to produce a greater variety of goods, which increases consumer choice and satisfaction, making trade more beneficial for both parties.

Question 4

A firm's foreign direct investment.decisions are,in the case of horizontal FDI,strongly influenced by ________ and,in the case of vertical FDI,strongly influenced by ________.

Accepted Answer

Horizontal FDI refers to a multinational company investing in the same industry abroad that it operates in at home. In this case, trade costs (such as tariffs, transportation expenses, etc.) play a significant role because the firm is essentially exporting its products to another country. On the other hand, vertical FDI refers to a multinational company investing in different stages of the production process in another country. In vertical FDI, production costs (such as labor, energy, and other factors of production) are critical because the firm is looking to benefit from lower costs in the host country.

Question 5

When a multinational affiliate replicates production in a foreign country it is called ________ foreign direct investment.

Accepted Answer

Horizontal foreign direct investment refers to when a multinational company duplicates its home country-based production processes in a foreign country. This means that the affiliate in the foreign country produces the same goods or services as the parent company does in its home country. This type of investment is also known as direct duplication.

Question 6

What is the nature of the proximity-concentration tradeoff that firms have to deal with then making decisions regarding foreign direct investment?

Accepted Answer

The answer of What is the nature of the proximity-concentration...

Question 7

What are the consequences of outsourcing production on the welfare of countries?

Accepted Answer

The answer of What are the consequences of outsourcing production...

Question 8

A firm is more likely to engage in horizontal foreign direct investment if

Accepted Answer

Horizontal foreign direct investment involves a company expanding its operations to foreign countries by establishing subsidiaries that produce the same products as the parent company. This type of investment is more likely when trade costs are high as importing products becomes more expensive. Also, internal economies of scale allow the firm to increase production and reduce costs per unit. Thus, the combination of high trade costs and internal economies of scale makes the firm more likely to engage in horizontal foreign direct investment.

Question 9

When a multinational affiliate replicates elements of a production process in a foreign country it is called ________ foreign direct investment.

Accepted Answer

Vertical foreign direct investment occurs when a multinational affiliate replicates elements of a production process in a foreign country.

Quiz 8: Firms in the Global Economy: Export Decisions,Outsourcing,and Multinational Enterprises

During the past decade,U.S.imports of business services have ,U.S.exports of business services have ,and U.S.net exports of business services have .