International business chapter 8

Which of the following are national accounts that track both payments to and receipts from other countries?

balance-of-payments

Which account in the balance of payments records transactions involving the export and import of goods and services?

current

Direct effects of FDI on employment in the host country arise when a foreign MNE

employs a number of host country citizens.

The strategic behavior theory is used to

explain the patterns of FDI flows based on the idea that FDI flows are a reflection of strategic rivalry between firms in the global marketplace.

When a firm exports its products to a foreign country, foreign direct investment occurs.

false

A computer manufacturing firm from the United States invests in a microprocessor manufacturing plant in Taiwan. This is an example of

foreign direct investment.

General Electric (GE) built an operation from scratch in Nigeria. This is an example of a(n)

greenfield investment

According to internalization theory, one of the drawbacks of licensing is that

it does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

As a company policy, Alberton Consumer Products periodically grants foreign entities the right to produce and sell its products in return for a royalty fee on every unit sold. Alberton Consumer Products' approach is

licensing.

Jingo Products is a market leader in playground equipment which is typically large and bulky and weighs a lot. Because of competitive reasons, Jingo Products sells its entire line at very low prices. Although its products can be produced anywhere, it is considering exporting as a way to grow in overseas markets. The viability of Jingo Products' exporting strategy could be constrained by transportation costs, particularly of products that can be produced in almost any location and have a

low value-to-weight ratio.

Which of the following arises when two or more enterprises encounter each other in different regional markets, national markets, or industries?

multipoint competition

Which account in the balance of payments records transactions involving the export and import of goods and services?

not: foreign

Which view of FDI traces its roots to Marxist political and economic theory?

not: pragmatic nationalism

According to the ________, FDI has both benefits and costs and should be allowed only if the benefits outweigh the costs.

pragmatic nationalist view

Which view of FDI traces its roots to Marxist political and economic theory?

radical

A firm is most likely to favor foreign direct investment over exporting when

the firm wishes to maintain control over its operations and business strategy.

A current account deficit is also known as a(n)

trade deficit.

According to the free market view, countries should specialize in the production of those goods and services that they can produce most efficiently.

true

By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing.

true

Multipoint competition arises when two or more enterprises encounter each other in different regional markets, national markets, or industries.

true

Which of the following statements is true regarding foreign direct investment?

FDI has grown more rapidly than world trade and world output.