quiz questions (exam#2)

The amount invested by U.S. firms in foreign markets between 1998 and 2014 was about

4 trillion

A tariff is?

A tax levied on imports

How is a weak currency an advantage in trade

A weak currency boosts export sales for the country

As part of its effort to protect its auto makers from foreign competition, suppose Brazil levied a tariff based on a proportion of the value of the product. Brazil would be imposing a _____ tariff.

Ad valorem

The 13 percent tariff the European Union imposed on imports of Chinese steel is...

Ad valorem tariff

All of the countries below are considered to be significant investors in foreign markets over the last 20 years except

Canada

The infant industry argument suggests that protecting infant industries from foreign competitors will allow them time to become large enough to enjoy economies of scale. Who typically wins an who loses from a government policy to protect infant industries?

Domestic consumers and foreign producers lose, while the home government and home producers gain

The effect of bulky or heavy products on transportation costs can make ____ an inappropriate strategy.

Exporting

Which of the following is not a potential benefit to Japan from Burberry's decision to invest in the country

FDI may be accompanied by some loss of economic independence

If consumers in different countries desire different product attributes, it would be best engage in

Foreign direct investment

In 2015, Burberry, the British luxury apparel company, opened a limited number of wholly owned stores in Japan with a goal of having 35 to 50 stores by 2018. Burberry's stores in Japan can best be described as

Foreign direct investment

Which argument best explains why the United States imposed tariffs on imports of Chinese steel?

Government intervention is necessary for protecting jobs and industries from unfair foreign competition

Burberrys current investment in Japan can best be characterized as

Greenfield investment

The world flow of foreign direct investment between 1990 and 2017 increased 600 percent. If a company decides to establish a new operation in a foreign country, that company has engaged in

Greenfield investment

Why do you think the value of the indian rupee declined against that of the U.S. dollar after the U.S. Fed had announced that it would begin to wind down its economic stimulus program

Increase in U.S. interest rates

The United States is an attractive destination for foreign investment for all of the following reasons EXCEPT:

Its favorable military power

If a firm's know-how, skills, and capabilities can be protected by contract, and if tight control over foreign operations is not vital to remain competitive, and there are reasons to believe that additional costs through transportation or tariffs would be high, the most effective approach would be _______________.

Licensing

Where is the foreign exchange market located?

Nowhere

What type of exchange rate regime is present in Vietnam?

Pegged

Brazil used tariffs to protect its auto industry in the 1950's. Tariffs are?

Taxes levied on imports or exports

Which is true of tariffs

They are pro-producer and anti-consumer

Alexander Hamilton argued that tariffs are an effective means of protecting infant industries until they are better able to compete. Which is not true of tariffs used to protect infant industries?

They promote more efficient use of resources

_____ has been the worlds largest investor since world war 2

United States

Which of the following has contributed to the problems Vietnam is facing with its coffee revenues?

Vietnam's currency is pegged to the dollar

the extent to which a firm's future international earning power is affected by changes in exchange rates

economic exposure

If your household goods can be efficiently produced through economies of scale, it would be a good idea to use a(n) _______ strategy.

exporting

If your proprietary know-how of "green" processes is difficult to transfer to other firms, the most effective approach would be _______________.

exporting or foreign direct investment

The United States benefits as a recipient of foreign investment in which of the following ways

influx of capital and technology