POS 486 QUIZ 4 Test Bank Questions And Answers
With 2025 Updated Solutions
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
d) the creation of new plants and companies
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.
c) defend or increase their market share.
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.
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.
b) MNC affiliates charge for the internal sales of goods and services.
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.
b) the United States.
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
Liberals are skeptical about the benefits of MNCs.
True / False
True
During the past decade, most new FDI has been in new facilities and productive assets.
, True / False
True
Horizontal integration is a strategy to deal with foreign investment barriers.
True / False
True
MNCs use transfer prices to reduce their reported income.
True / False
True
A growing number of countries are managing sovereign wealth funds together with their official currency
reserves.
True / False
False
Empirical studies suggest that whether MNC activities are positive or negative depends upon the situation.
True / False
True
Countries in the North have generally become more restrictive to FDI over time.
With 2025 Updated Solutions
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
d) the creation of new plants and companies
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.
c) defend or increase their market share.
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.
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.
b) MNC affiliates charge for the internal sales of goods and services.
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.
b) the United States.
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
Liberals are skeptical about the benefits of MNCs.
True / False
True
During the past decade, most new FDI has been in new facilities and productive assets.
, True / False
True
Horizontal integration is a strategy to deal with foreign investment barriers.
True / False
True
MNCs use transfer prices to reduce their reported income.
True / False
True
A growing number of countries are managing sovereign wealth funds together with their official currency
reserves.
True / False
False
Empirical studies suggest that whether MNC activities are positive or negative depends upon the situation.
True / False
True
Countries in the North have generally become more restrictive to FDI over time.
