POS 486 Quiz 4 | 35 Study Questions And Answers
Rated A+
1) Greenfield investment refers to
a) the purchase of existing plants and companies
b) the purchase of shares of plants and companies
c) mergers with existing plants and companies
d) the creation of new plants and companies
the creation of new plants and companies
2) Firms engage in horizontal integration in part to
a) gain more control over inputs into the production process.
b) limit government scrutiny of their activities.
c) defend or increase their market share.
d) ensure the quality of goods that reach the consumer.
defend or increase their market share
3) Firms engage in vertical integration
a) to internalize different stages of the production process within the firm.
b) to get behind trade barriers of other countries.
c) to compete more effectively with local firms through their subsidiaries.
d) to defend or increase their market share.
to internalize different stages of the production process within the firm
4) Transfer prices are prices that
a) MNCs charge for the sale of goods and services to other MNCs.
b) MNC affiliates charge for the internal sales of goods and services.
c) MNCs charge for the sale of goods and services to host states.
, d) MNCs transfer on to the consumer.
MNC affiliates charge for the internal sales of goods and services
5) The country with the highest level of inward FDI stock as a share of its GDP is
a) Italy.
b) the United States.
c) France
d) Japan.
This may need a specific update, but historically small countries like Luxembourg often rank high.
6) What factors account for the overall increase in global FDI flows from 1970 to the present?
a) Deregulation
b) Privatization
c) Reduction of capital flow restrictions
d) New global agreements on investment protection
Deregulation, privatization, reduction of capital flow restrictions, new global agreements on investment
protection
7) Liberals are skeptical about the benefits of MNCs.
False
8) During the past decade, most new FDI has been in new facilities and productive assets.
False
9) Horizontal integration is a strategy to deal with foreign investment barriers.
False
Rated A+
1) Greenfield investment refers to
a) the purchase of existing plants and companies
b) the purchase of shares of plants and companies
c) mergers with existing plants and companies
d) the creation of new plants and companies
the creation of new plants and companies
2) Firms engage in horizontal integration in part to
a) gain more control over inputs into the production process.
b) limit government scrutiny of their activities.
c) defend or increase their market share.
d) ensure the quality of goods that reach the consumer.
defend or increase their market share
3) Firms engage in vertical integration
a) to internalize different stages of the production process within the firm.
b) to get behind trade barriers of other countries.
c) to compete more effectively with local firms through their subsidiaries.
d) to defend or increase their market share.
to internalize different stages of the production process within the firm
4) Transfer prices are prices that
a) MNCs charge for the sale of goods and services to other MNCs.
b) MNC affiliates charge for the internal sales of goods and services.
c) MNCs charge for the sale of goods and services to host states.
, d) MNCs transfer on to the consumer.
MNC affiliates charge for the internal sales of goods and services
5) The country with the highest level of inward FDI stock as a share of its GDP is
a) Italy.
b) the United States.
c) France
d) Japan.
This may need a specific update, but historically small countries like Luxembourg often rank high.
6) What factors account for the overall increase in global FDI flows from 1970 to the present?
a) Deregulation
b) Privatization
c) Reduction of capital flow restrictions
d) New global agreements on investment protection
Deregulation, privatization, reduction of capital flow restrictions, new global agreements on investment
protection
7) Liberals are skeptical about the benefits of MNCs.
False
8) During the past decade, most new FDI has been in new facilities and productive assets.
False
9) Horizontal integration is a strategy to deal with foreign investment barriers.
False
