WGU; C200; Global Economics; Chapter 6 questions
with verified answers
____ refers to the clustering of economic activities in certain locations.
a. Internalization
b. Expropriation
c. Agglomeration
d. Intrafirm trade Ans✓✓✓ Agglomeration
____ refers to the deal struck by MNEs and host governments, which change their
requirements after the initial FDI entry.
a. Obsolescing bargain
b. Automated bargain
c. Integrative bargain
d. Ongoing bargain Ans✓✓✓ Obsolescing bargain
_____ is a type of FDI in which a firm duplicates its home country-based activities
at the same value chain stage in a host country.
a. Platform FDI
b. Horizontal FDI
c. Vertical FPI
d. Backward vertical FDI Ans✓✓✓ Horizontal FDI
_____ is the amount of FDI moving in a given period (usually a year) in a certain
direction.
a. FDI flow
,b. FDI stock
c. Vertical FDI
d. Horizontal FDI Ans✓✓✓ FDI flow
_____ knowledge can be written down and transferred without losing much of its
richness.
a. Implicit
b. Inherent
c. Tacit
d. Explicit Ans✓✓✓ Explicit
_____ knowledge is noncodifiable and its acquisition and transfer requires hands-
on practice.
a. Tacit
b. Explicit
c. Lucid
d. A priori Ans✓✓✓ Tacit
_____ refers to international transactions between two subsidiaries in two
countries controlled by the same MNE.
a. Monopolization
b. Intrafirm trade
c. Agglomeration
d. Oligopoly Ans✓✓✓ Intrafirm trade
, _____ refers to the ability to extract favorable outcome from negotiations due to
one party's strengths.
a. Accommodating power
b. Expropriation
c. Compromising power
d. Bargaining power Ans✓✓✓ Bargaining power
_____ refers to the problems associated with unauthorized diffusion of firm-
specific know-how.
a. Dissemination risk
b. Knowledge spill
c. Technological spill
d. Market imperfection Ans✓✓✓ Dissemination risk
_____ refers to the reaction of local firms to rise to the challenge demonstrated
by MNEs through learning and imitation.
a. Domino effect
b. Bandwagon effect
c. Dissemination risk
d. Contagion effect Ans✓✓✓ Contagion effect
_____ refers to the replacement of cross-border markets with one firm locating in
two or more countries.
a. Ownership advantage
b. Agglomeration
c. Location advantage
with verified answers
____ refers to the clustering of economic activities in certain locations.
a. Internalization
b. Expropriation
c. Agglomeration
d. Intrafirm trade Ans✓✓✓ Agglomeration
____ refers to the deal struck by MNEs and host governments, which change their
requirements after the initial FDI entry.
a. Obsolescing bargain
b. Automated bargain
c. Integrative bargain
d. Ongoing bargain Ans✓✓✓ Obsolescing bargain
_____ is a type of FDI in which a firm duplicates its home country-based activities
at the same value chain stage in a host country.
a. Platform FDI
b. Horizontal FDI
c. Vertical FPI
d. Backward vertical FDI Ans✓✓✓ Horizontal FDI
_____ is the amount of FDI moving in a given period (usually a year) in a certain
direction.
a. FDI flow
,b. FDI stock
c. Vertical FDI
d. Horizontal FDI Ans✓✓✓ FDI flow
_____ knowledge can be written down and transferred without losing much of its
richness.
a. Implicit
b. Inherent
c. Tacit
d. Explicit Ans✓✓✓ Explicit
_____ knowledge is noncodifiable and its acquisition and transfer requires hands-
on practice.
a. Tacit
b. Explicit
c. Lucid
d. A priori Ans✓✓✓ Tacit
_____ refers to international transactions between two subsidiaries in two
countries controlled by the same MNE.
a. Monopolization
b. Intrafirm trade
c. Agglomeration
d. Oligopoly Ans✓✓✓ Intrafirm trade
, _____ refers to the ability to extract favorable outcome from negotiations due to
one party's strengths.
a. Accommodating power
b. Expropriation
c. Compromising power
d. Bargaining power Ans✓✓✓ Bargaining power
_____ refers to the problems associated with unauthorized diffusion of firm-
specific know-how.
a. Dissemination risk
b. Knowledge spill
c. Technological spill
d. Market imperfection Ans✓✓✓ Dissemination risk
_____ refers to the reaction of local firms to rise to the challenge demonstrated
by MNEs through learning and imitation.
a. Domino effect
b. Bandwagon effect
c. Dissemination risk
d. Contagion effect Ans✓✓✓ Contagion effect
_____ refers to the replacement of cross-border markets with one firm locating in
two or more countries.
a. Ownership advantage
b. Agglomeration
c. Location advantage
