Question Bank International Business Essay

Section 07 Remote Direct Investment Genuine/False Questions 1. (p. 242) A firm turns into a global endeavor when it embraces remote direct venture. Valid 2. (p. 242) Licensing includes the foundation of another activity in an outside nation. Bogus 3. (p. 242) If a firm that makes bikes in Germany gets a French bike maker, Greenfield speculation has occurred. Bogus 4. (p. 242) The measure of FDI attempted over a given timeframe is known as the progression of FDI. Valid 5. (p. 242) The all out aggregated estimation of remote claimed resources at a given time is the inflow of FDI. Bogus 6. (p. 242) FDI is seen by officials as a methods for dodging future exchange hindrances. Valid 7. (p. 244) Historically, most FDI has been aimed at the created countries of the world as firms situated in cutting edge nations put resources into the others’ markets. Valid 8. (p. 246) The aggregate sum of capital put resources into production lines, stores, places of business and such is alluded to as the load of FDI. Bogus 9. (p. 246) The biggest source nation for FDI has been China. Bogus 10. (p. 247) About 27 percent of the world’s biggest 100 nonfinancial multinationals in 2004 were American organizations. Valid 11. (p. 247) In creating nations, around 33% of FDI is as mergers and acquisitions. Valid 12. (p. 248) In 2004, around 66% of FDI stock was in administration businesses. Valid 13. (p. 249) When contrasted with sending out and permitting, FDI is the more costly and unsafe. Valid 14. (p. 250) Internalization hypothesis is otherwise called the market defects approach. Valid 15. (p. 250) One of the issues of permitting is that it might bring about a firm’s parting with significant innovative skill to a potential remote contender. Valid 16. (p. 251) An oligopoly is an industry made out of a set number of huge firms. Valid 17. (p. 252) When at least two undertakings experience each other in various territorial markets, national markets or businesses local rivalry happens. Bogus 18. (p. 252) According to Vernon, area explicit favorable circumstances can help clarify the nature and bearing of FDI. Bogus 19. (p. 253) Dunning, in the mixed worldview hypothesis, recommends that a firm should set up creation offices where outside resources or asset enrichments important to the creation of the item exist. Valid 20. (p. 254) Pragmatic patriotism follows its foundations to Marxist political and financial hypothesis. Bogus 21. (p. 254) Classical financial matters and the worldwide exchange hypotheses of Adam Smith and David Ricardo structure the reason for the free market see. Valid 22. (p. 255) The free market see contends that FDI is an advantage to both the source nation and to the host nation. Valid 23. (p. 255) Countries receiving a down to earth position seek after arrangements intended to expand the national advantages and limit the national expenses. Valid 24. (p. 256) A part of even minded patriotism is the propensity to forcefully court FDI accepted to be in the national enthusiasm by, for instance, offering sponsorships to remote MNEs as tax reductions or awards. Valid 25. (p. 257) Foreign direct speculation can make a positive commitment to a host economy by providing capital, innovation and the board assets that would some way or another not be accessible and along these lines help that country’s financial development rate. Valid 26. (p. 258) There is inquire about supporting the view that global firms regularly move critical innovation when they put resources into a remote nation. Valid 27. (p. 258) Jobs made in neighborhood providers because of the MNE’s venture and occupations made in view of expanded nearby spending by workers of the MNE are instances of direct business impacts of FDI. Bogus 28. (p. 258) Host nation residents that are utilized by a MNE following a FDI are a case of an aberrant impact of FDI. Bogus 29. (p. 259) A country’s equalization of installments accounts monitor the two its installments to and its receipts from different nations. Valid 30. (p. 259) A present record deficiency exists when a nation imports more than it sends out. Valid 31. (p. 259) lately, the U.S. has run a constant equalization of installments excess. Bogus 32. (p. 260) Host governments once in a while stress that the auxiliaries of remote MNEs may have more prominent financial force than indigenous contenders. Valid 33. (p. 261) FDI doesn't profit the host country’s equalization of installments if the remote auxiliary makes interest for home-nation fares of capital hardware, middle of the road merchandise or reciprocal items. Bogus 34. (p. 262) The term seaward creation alludes to FDI attempted to serve the home market. Valid 35. (p. 263) Countries can't disallow national firms from putting resources into specific nations for political reasons. Bogus 36. (p. 264) The two most normal techniques for limiting internal FDI are possession limitations and execution prerequisites. Valid 37. (p. 265) The WTO has been fruitful in endeavors to start talks planned for setting up a widespread arrangement of rules intended to advance the progression of FDI. Bogus 38. (p. 266) Licensing is a decent alternative for firms in innovative ventures where ensuring firm-explicit mastery is of central significance. Bogus 39. (p. 266-267) Typically permitting will be a typical procedure in oligopolies where serious reliance necessitates that worldwide firms keep up close authority over remote activities with the goal that they can dispatch composed assaults against their worldwide rivals. Bogus 40. (p. 267) Licensing is increasingly regular in divided, low-tech businesses in which all around scattered assembling isn't an alternative. Valid Numerous Choice Questions 41. (p. 242) FDI happens when a A. Residential firm imports items and administrations from another nation B. Firm ships its item starting with one nation then onto the next C. Firm puts resources into the supply of another organization D. Firm puts straightforwardly in offices to create as well as market an item in an outside nation 42. (p. 242) A Greenfield speculation A. Is a type of FDI that includes the foundation of another activity in a remote nation B. Includes a 7 percent stock in a gained outside business element C. Includes a merger with a remote business D. Happens when a firm obtains another organization in a remote countr 43. (p. 242) If General Electric, a U.S. based organization, bought a half enthusiasm for an organization in Italy, that buy would be a case of a(n) A. Minority securing B. Inside and out stake C. Dominant part obtaining D. Greenfield speculation 44. (p. 242) The measure of FDI embraced over a given timeframe is A. The progression of FDI B. The load of FDI C. The FDI outpouring D. The FDI inflow 45. (p. 242) The load of FDI is A. The measure of FDI embraced over a given timeframe B. The all out collected estimation of outside possessed resources at a given time C. The progression of FDI out of a nation D. The progression of FDI into a nation 46. (p. 242) FDI has been ascending for the entirety of the accompanying reasons, with the exception of A. The globalization of the world economy B. The general increment in exchange hindrances in the course of recent years C. Firms are attempting to bypass exchange boundaries D. There is a move toward majority rule political foundations and free market economies 47. (p. 244) Historically, most FDI has been aimed at the _____ countries of the world as firms situated in cutting edge nations put resources into A. Immature, immature nations B. Created, immature nations C. Grown, each other’s markets D. Immature, each other’s markets 48. (p. 244) The U.S. has been an appealing objective for FDI as a result of the entirety of the accompanying reasons, with the exception of A. Its little and well off local markets B. Its dynamic and stable economy C. Its great world of politics D. Its receptiveness to FDI 49. (p. 244) Identify the inaccurate proclamation in regards to the course of FDI. A. Verifiably, most FDI has been aimed at the creating countries of the world B. During the 1980s and 1990s, the United States was frequently the most loved objective for FDI inflows C. The created countries of the EU have gotten critical FDI inflows D. Late inflows into creating countries have been focused at the developing economies of South, East and Southeast Asia 50. (p. 246) Africa is certifiably not a well known goal for FDI in view of the entirety of the accompanying reasons, with the exception of A. Political turmoil in the district B. Furnished clash in the district C. Progression of FDI guidelines D. Visit arrangement changes in the area 51. (p. 246) The aggregate sum of capital put resources into production lines, stores, places of business and so forth is summed up by A. Net fixed capital development B. Absolute speculation capital C. Absolute substantial venture D. Net depreciable ventures 52. (p. 246) The biggest source nation for FDI since World War II has been A. Japan B. China C. The United States D. The United Kingdom 53. (p. 247) Most cross-outskirt venture is A. As Greenfield ventures B. Made by means of mergers and acquisitions C. Among American and Japanese organizations D. Engaged with building new offices 54. (p. 247) Which of coming up next isn't a motivation behind why firms want to get existing resources instead of embrace green-field ventures? A. Remote firms are procured in light of the fact that those organizations have important key resources B. Firms make acquisitions since they accept they can expand the productivity of the obtained unit by moving capital, innovation or the board aptitudes C. Despite the fact that Greenfield ventures are relatively less unsafe for a firm acquisitions consistently return higher benefits D. Mergers and acquisitions are faster to execute than green-field ventures 55. (p. 247) In creating countries most FDI inflows are as A. Mergers B. Greenfield speculations C. Acquisitions D. Non-benefit associations 56. (p. 248) The area sythesis of FDI shows that by 2004 roughly _____ of FDI stock was in administration indus