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Multiple Choice Quiz
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1
In the Opening Case, Starbucks most common strategy in Asia was to
A)exporting
B)importing
C)Joint venture
D)License its format to a local operator
E)Advertising
2
_______ occurs when a firm invests directly in facilities to produce and/or market a product in a foreign country.
A)Exporting
B)Importing
C)Foreign direct investment
D)Fixed capital formation
E)Oligopoly
3
The _______ refers to the total accumulated value of foreign-owned assets at a given time.
A)flow of FDI
B)outflow of FDI
C)fixed capital formation
D)stock of FDI
E)inflow of FDI
4
Since World War II, which country has been the largest source country for FDI
A)China
B)India
C)U.S.A.
D)U.K.
E)Russia
5
The flow of FDI refers to:
A)The amount of FDI undertaken over a given time.
B)The totally accumulated value of foreign-owned assets at a given time.
C)The flow of FDI out of the country.
D)The flow of FDI into a country.
E)The establishment of a wholly new operation in a foreign country.
6
The stock of FDI refers to:
A)The amount of FDI undertaken over a given time.
B)The totally accumulated value of foreign-owned assets at a given time.
C)The flow of FDI out of the country.
D)The flow of FDI into a country.
E)The establishment of a wholly new operation in a foreign country.
7
A green-field investment involves:
A)The amount of FDI undertaken over a given time.
B)The totally accumulated value of foreign-owned assets at a given time.
C)The flow of FDI out of the country.
D)The flow of FDI into a country.
E)The establishment of a wholly new operation in a foreign country.
8
Much of the recent increases in FDI are being driven by the:
A)organization executives viewing FDI as way to minimize taxes.
B)governments of the developed nations desire for FDI outflows.
C)political and economic changes occurring in many of the world's developing nations.
D)political and economic changes occurring in the OECD nations.
E)developing countries taking over the developed nations.
9
_______ refers to the total amount of capital invested in factories, stores, buildings, and the like.
A)FDI outflow
B)flow of FDI
C)gross fixed capital formation
D)stock of FDI
E)oligopoly
10
Canada's FDI outflows in the past years have went to:
A)Chinese companies operating in Canada.
B)Japanese companies operating in China.
C)Affiliates and subsidiaries in the U.S.
D)Affiliates and subsidiaries in the South Korea.
E)Canadian affiliates and subsidiaries in South America.
11
Statistics Canada reports that most overseas investments made by Canadian companies in the last five years have gone to
A)China
B)Existing affiliates and subsidiaries
C)New subsidiaries of Canadian companies
D)New affiliates of Canadian companies
E)Greenfield investments
12
Which of the following involves producing goods at home and then shipping them to the receiving country for sale?
A)Licensing
B)Importing
C)Foreign direct investment
D)Oligopoly
E)Exporting
13
______ involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit the foreign entity sells.
A)Exporting
B)Oligopoly
C)Licensing
D)FDI
E)Importing
14
What often constrains the viability of an exporting strategy?
A)Managerial thinking
B)Transportation costs and trade barriers
C)Limited production potential
D)FDI stock
E)Viability of a firm to license
15
Internationalization theory seeks to explain why firms often prefer:
A)FDI over licensing.
B)licensing over exporting.
C)exporting over FDI.
D)FDI over exporting.
E)exporting over licensing.
16
This is an industry composed of a limited number of large firms
A)Pure Competition.
B)Monopoly.
C)Oligopoly.
D)Multipoint competition.
E)Location competition.
17
This situation arises when two or more enterprises encounter each other in different regional markets or national markets.
A)Pure Competition.
B)Monopoly.
C)Oligopoly.
D)Multipoint competition.
E)Location competition.
18
_______ is defined as a record of a country's payments to and receipts from other countries.
A)Current account
B)Balance-of-payment account
C)FDI account
D)Externalities account
E)National sovereignty account
19
Record of a country's export and import of goods and services is tracked by:
A)current account.
B)balance-of-payment account.
C)FDI account.
D)externalities account.
E)national sovereignty account.
20
Which of the following is not a main concern of inward FDI for host countries?
A)The possible loss of taxes that will be paid to the home country instead of the host country.
B)The perceived loss of national sovereignty and autonomy.
C)The possible adverse effects on competition with the host country.
D)Adverse effects on the balance of payments.
E)All of these are concerns.
21
When a Canadian textile firm shuts its plants and moves to Mexico:
A)imports into Canada rise and the trade position improves.
B)imports into Canada rise and the trade position deteriorates.
C)exports from Canada rise and the trade position improves.
D)exports from Canada rise and the trade position deteriorates.
E)exports and imports from Canada rise.
22
Hollywood has blamed _____ for the loss of jobs within its film industry.
A)Brazil
B)Japan
C)Canada
D)China
E)E.U.
23
Host governments use a wide range of controls to restrict FDI in one way or another. The two most common are:
A)Ownership restraints and performance requirements
B)Ownership restraints and tax payments
C)Tax payments and performance requirements
D)Tax payments and available utilities
E)Host country board of directors members





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