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Multiple Choice
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1

What type of MNC produces a product domestically and ships it to a foreign market?
A)joint venture
B)fully owned foreign subsidiary
C)exporter
D)importer
2

When an MNC cannot produce an actual product in a foreign subsidiary due to political restrictions, it can export technology and knowledge through:
A)an exporter
B)a joint venture
C)an importer
D)a licensing agreement
3

Many MNCs prefer ____________ above all other methods of establishing a foreign presence.
A)exporting
B)joint ventures
C)fully owned foreign subsidiaries
D)none of the above
4

What one currency is worth in terms of another currency is called a(n) __________.
A)euro
B)exchange rate
C)spot rate
D)forward rate
5

Currency exchange rates tend to vary inversely with their ____________.
A)interest rates
B)cross rate
C)purchasing power
D)economic power
6

The system of government accounts that catalog the flow of economic transactions between the residents of one country and the residents of other countries is called ________________.
A)a joint venture
B)current account
C)balance of payments
D)balance of interest rates
7

The exchange rate that is paid for a currency for immediate delivery is the:
A)spot rate
B)cross rate
C)forward rate
D)none of the above
8

The exchange rate between two currencies outside the American dollar is called the:
A)forward rate
B)cross rate
C)spot rate
D)none of the above
9

A multinational corporation may be defined as:
A)a company that imports foreign products
B)a company that hires foreign labor
C)a company which carries on business activity outside the U.S.
D)none of the above
10

A fully owned foreign subsidiary is a form of MNC in which:
A)the MNC owns and operates the firm by itself.
B)the MNC has a partner in the foreign country.
C)the foreign government is cooperative.
D)none of the above





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