BUSMHR 2000 Exam 2
political union - ✔️✔️regional integration with no internal tariffs, common external
tariffs, factor mobility allowed, common currency, monetary & fiscal policies, and
common political institutions
common market - ✔️✔️regional integration with no internal tariffs, common external
tariffs, and factor (i.e. factors of production - labor, capital etc.) mobility allowed
Flow - ✔️✔️amount of FDI over a period of time (one year)
Stock - ✔️✔️total accumulated value of foreign owned assets
Outflow - ✔️✔️amount of FDI from a country (cumulative, out of a country)
Inflow - ✔️✔️amount of FDI entering a country
C - ✔️✔️Which of the following is not a factor leading to growth of FDI?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
A - ✔️✔️Which factor of growth can be described as less trade barriers?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
B - ✔️✔️Which factor of growth can be described as deregulation, privatization, fewer
restrictions?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
D - ✔️✔️Which factor of growth can be described as regional integration but between
good countries?
A. A fear of protectionism
, B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
E - ✔️✔️Which factor of growth can be described as many companies now viewing the
world as their market?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
B - ✔️✔️Which of the following is not a recent trend in FDI?
A. Developed nations still largest share of FDI inflows
B. Underdeveloped nations have the largest share of FDI outflows
C. Inflows are increasing in developing nations
D. Africa's inability to attract FDI is due to political unrest, armed conflicts, and frequent
changes in economic policies
greenfield investment - ✔️✔️establishment of a new operation abroad
acquisition - ✔️✔️purchase of an existing operation abroad
40-80 - ✔️✔️__-__% is mergers and acquisitions
mergers and acquisitions - ✔️✔️______ is better when investing in a developed
country
greenfield investment - ✔️✔️______ is better when investing in a developing country
vertical FDI - ✔️✔️firm locates different stages of production in different countries
(assembly in one country, parts from another country, etc.)
Foreign Direct Investment - ✔️✔️involves direct ownership in productive assets where
the MNC has control over its investment
Horizontal FDI - ✔️✔️firm duplicates its home country-based activities at the same
value chain stage in a host country (Ex. all countries assemble cars)
FDI - ✔️✔️When transportation costs are high, tariffs are high, and there is a lack of
domestic capacity what is the best option?
political union - ✔️✔️regional integration with no internal tariffs, common external
tariffs, factor mobility allowed, common currency, monetary & fiscal policies, and
common political institutions
common market - ✔️✔️regional integration with no internal tariffs, common external
tariffs, and factor (i.e. factors of production - labor, capital etc.) mobility allowed
Flow - ✔️✔️amount of FDI over a period of time (one year)
Stock - ✔️✔️total accumulated value of foreign owned assets
Outflow - ✔️✔️amount of FDI from a country (cumulative, out of a country)
Inflow - ✔️✔️amount of FDI entering a country
C - ✔️✔️Which of the following is not a factor leading to growth of FDI?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
A - ✔️✔️Which factor of growth can be described as less trade barriers?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
B - ✔️✔️Which factor of growth can be described as deregulation, privatization, fewer
restrictions?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
D - ✔️✔️Which factor of growth can be described as regional integration but between
good countries?
A. A fear of protectionism
, B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
E - ✔️✔️Which factor of growth can be described as many companies now viewing the
world as their market?
A. A fear of protectionism
B. political and economic changes
C. increase in tariffs worldwide
D. new bilateral investment treaties
E. globalization of the world economy
B - ✔️✔️Which of the following is not a recent trend in FDI?
A. Developed nations still largest share of FDI inflows
B. Underdeveloped nations have the largest share of FDI outflows
C. Inflows are increasing in developing nations
D. Africa's inability to attract FDI is due to political unrest, armed conflicts, and frequent
changes in economic policies
greenfield investment - ✔️✔️establishment of a new operation abroad
acquisition - ✔️✔️purchase of an existing operation abroad
40-80 - ✔️✔️__-__% is mergers and acquisitions
mergers and acquisitions - ✔️✔️______ is better when investing in a developed
country
greenfield investment - ✔️✔️______ is better when investing in a developing country
vertical FDI - ✔️✔️firm locates different stages of production in different countries
(assembly in one country, parts from another country, etc.)
Foreign Direct Investment - ✔️✔️involves direct ownership in productive assets where
the MNC has control over its investment
Horizontal FDI - ✔️✔️firm duplicates its home country-based activities at the same
value chain stage in a host country (Ex. all countries assemble cars)
FDI - ✔️✔️When transportation costs are high, tariffs are high, and there is a lack of
domestic capacity what is the best option?
