BUAD 2080 EXAM 3 QUESTIONS WITH
CORRECT ANSWERS
________ is the extension of company activities into stages of production that
provide a firm's inputs or absorb its outputs. - ANSWER Vertical integration
Happyland is a country characterized by beautiful beaches, vast natural
resources, and a highly skilled labor force. Happyland is now encouraging
foreign direct investment flows. The country has been exporting textiles,
computer hardware, and software programs. The net result of the trade is that
Happyland exports far more goods and services and receives more income from
abroad than it imports and pays abroad.
If Happyland advertises its beaches and attracts tourists, the tourism-related
income would be recorded in its ________ account. - ANSWER Services
According to the international product life cycle theory, in which of the
following stages is a good produced in the home country because of uncertain
domestic demand and to keep production close to the research department? -
ANSWER New Product Stage
________ is an investment that does not involve obtaining a degree of control in
a company. - ANSWER Portfolio investment
When a U.S. company buys shares of stock in a French company on France's
stock market, the U.S. balance of payments records the transaction as an
________. - ANSWER outflow of capital with a minus sign
Home nations discourage foreign direct investment outflows because it
________. - ANSWER replaces jobs in the home nation
The realization that companies can start production in the most efficient and
productive locations in the world and export to markets worldwide led to a new
surge of foreign direct investment into ________. - ANSWER Newly
industrialized nations
, A(n) ________ advantage is the advantage of conducting a particular economic
activity in a specific area because of the characteristics of that area. - ANSWER
location
Which of the following methods is being used when a host country provides
lower tax rates and low-interest loans to firms from abroad for encouraging
inflows of foreign direct investment? - ANSWER financial incentives
Which of the following methods is used by a host country to restrict incoming
foreign direct investment? - ANSWER performance demands
Which of the following is true of foreign direct investment? - ANSWER The
desire to increase a firm's global competitiveness drives many cross-border
mergers and acquisitions.
Happyland is a country characterized by beautiful beaches, vast natural
resources, and a highly skilled labor force. Happyland is now encouraging
foreign direct investment flows. The country has been exporting textiles,
computer hardware, and software programs. The net result of the trade is that
Happyland exports far more goods and services and receives more income from
abroad than it imports and pays abroad.
If Happyland is successful in attracting foreign direct investment, transactions
involving those investments would appear in the country's ________ account. -
ANSWER capital
When a U.S. subsidiary in another country remits profits back to its parent
company in the U.S., the receipt of profits is recorded in the ________. -
ANSWER income receipts account and given a plus sign
A company can achieve market power through ________. - ANSWER vertical
integration
If a Japanese citizen invests in the Australian stock market, the transaction
would show up on the capital account in the balance of payments of ________.
- ANSWER both Japan and Australia
CORRECT ANSWERS
________ is the extension of company activities into stages of production that
provide a firm's inputs or absorb its outputs. - ANSWER Vertical integration
Happyland is a country characterized by beautiful beaches, vast natural
resources, and a highly skilled labor force. Happyland is now encouraging
foreign direct investment flows. The country has been exporting textiles,
computer hardware, and software programs. The net result of the trade is that
Happyland exports far more goods and services and receives more income from
abroad than it imports and pays abroad.
If Happyland advertises its beaches and attracts tourists, the tourism-related
income would be recorded in its ________ account. - ANSWER Services
According to the international product life cycle theory, in which of the
following stages is a good produced in the home country because of uncertain
domestic demand and to keep production close to the research department? -
ANSWER New Product Stage
________ is an investment that does not involve obtaining a degree of control in
a company. - ANSWER Portfolio investment
When a U.S. company buys shares of stock in a French company on France's
stock market, the U.S. balance of payments records the transaction as an
________. - ANSWER outflow of capital with a minus sign
Home nations discourage foreign direct investment outflows because it
________. - ANSWER replaces jobs in the home nation
The realization that companies can start production in the most efficient and
productive locations in the world and export to markets worldwide led to a new
surge of foreign direct investment into ________. - ANSWER Newly
industrialized nations
, A(n) ________ advantage is the advantage of conducting a particular economic
activity in a specific area because of the characteristics of that area. - ANSWER
location
Which of the following methods is being used when a host country provides
lower tax rates and low-interest loans to firms from abroad for encouraging
inflows of foreign direct investment? - ANSWER financial incentives
Which of the following methods is used by a host country to restrict incoming
foreign direct investment? - ANSWER performance demands
Which of the following is true of foreign direct investment? - ANSWER The
desire to increase a firm's global competitiveness drives many cross-border
mergers and acquisitions.
Happyland is a country characterized by beautiful beaches, vast natural
resources, and a highly skilled labor force. Happyland is now encouraging
foreign direct investment flows. The country has been exporting textiles,
computer hardware, and software programs. The net result of the trade is that
Happyland exports far more goods and services and receives more income from
abroad than it imports and pays abroad.
If Happyland is successful in attracting foreign direct investment, transactions
involving those investments would appear in the country's ________ account. -
ANSWER capital
When a U.S. subsidiary in another country remits profits back to its parent
company in the U.S., the receipt of profits is recorded in the ________. -
ANSWER income receipts account and given a plus sign
A company can achieve market power through ________. - ANSWER vertical
integration
If a Japanese citizen invests in the Australian stock market, the transaction
would show up on the capital account in the balance of payments of ________.
- ANSWER both Japan and Australia
