Peregrine Exam #3 Questions with
Correct Answers
Foreign Direct Investment - Answer-Investment made by a foreign company in the
economy of another country.
FDIs are used in.... - Answer-open markets not closed markets for investors
What are the types of FDIs? - Answer-Horizontal, vertical and conglomerate
Horizontal FDI - Answer-A type of FDI in which a firm duplicates its home country-based
activities at the same value chain stage in a host country.
Vertical FDI - Answer-A type of FDI in which a firm moves upstream or downstream at
different value chain stages in a host country.
Conglomerate FDI - Answer-Investing in business overseas that has no relationship to
your core business.
What bureau tracks FDIs into the U.S.? - Answer-Economic Analysis
What is an example of FDI? - Answer-Apple's investment in China
What are 4 ways to increase job creation? - Answer-Reduce interest rates, spend on
public works, spend on unemployment benefits, and cut business payroll taxes for new
hires
multinational corporation - Answer-An organization that manufactures and markets
products in many different countries and has multinational stock ownership and
multinational management
What can have a positive economic effect? - Answer-Multinational corporations
T/F Transnational business is considered diversifying the investment? - Answer-T
Market Entry Strategies - Answer-various tactics that managers use to enter foreign
markets
direct exporting - Answer-practice by which a company sells its products directly to
buyers in a target market
Licensing - Answer-the legal process whereby a licensor allows another firm to use its
manufacturing process, trademarks, patents, trade secrets, or other proprietary
knowledge
Correct Answers
Foreign Direct Investment - Answer-Investment made by a foreign company in the
economy of another country.
FDIs are used in.... - Answer-open markets not closed markets for investors
What are the types of FDIs? - Answer-Horizontal, vertical and conglomerate
Horizontal FDI - Answer-A type of FDI in which a firm duplicates its home country-based
activities at the same value chain stage in a host country.
Vertical FDI - Answer-A type of FDI in which a firm moves upstream or downstream at
different value chain stages in a host country.
Conglomerate FDI - Answer-Investing in business overseas that has no relationship to
your core business.
What bureau tracks FDIs into the U.S.? - Answer-Economic Analysis
What is an example of FDI? - Answer-Apple's investment in China
What are 4 ways to increase job creation? - Answer-Reduce interest rates, spend on
public works, spend on unemployment benefits, and cut business payroll taxes for new
hires
multinational corporation - Answer-An organization that manufactures and markets
products in many different countries and has multinational stock ownership and
multinational management
What can have a positive economic effect? - Answer-Multinational corporations
T/F Transnational business is considered diversifying the investment? - Answer-T
Market Entry Strategies - Answer-various tactics that managers use to enter foreign
markets
direct exporting - Answer-practice by which a company sells its products directly to
buyers in a target market
Licensing - Answer-the legal process whereby a licensor allows another firm to use its
manufacturing process, trademarks, patents, trade secrets, or other proprietary
knowledge
