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1 | |
In recent years, China has __________ the top ten merchandise exporting countries in the world; at the same time, foreign direct investment in China has become __________ important. |
| | A) | moved into; less |
| | B) | moved out of; less |
| | C) | moved into; more |
| | D) | moved out of; more |
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2 | |
Which of the following would be not considered foreign direct investment? |
| | A) | if General Motors builds a plant in South Africa |
| | B) | if Donald Trump purchases 15 percent of the outstanding stock of a Dutch firm |
| | C) | if Donald Trump purchases 25 percent of the outstanding stock of a Dutch firm |
| | D) | if a German company purchases the bonds of an American company |
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3 | |
As of 2002, the stock of FDI inflow for the world exceeded __________; the annual growth rates of this stock of FDI have generally been __________ the annual growth rates of international trade. |
| | A) | $7 trillion; greater than |
| | B) | $7 trillion; less than |
| | C) | $100 billion; greater than |
| | D) | $100 billion; less than |
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4 | |
The largest share of U.S. direct investment abroad is in |
| | A) | wholesale trade. |
| | B) | retail trade. |
| | C) | manufacturing. |
| | D) | professional, scientific, and technical services. |
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5 | |
Foreign direct investment in the U.S. is most commonly from which of the following regions? |
| | A) | Asia and Pacific |
| | B) | Europe |
| | C) | Canada and Mexico |
| | D) | Africa |
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6 | |
Suppose that, when there are restrictions on international capital mobility, Country A has a higher rate of return to capital than Country B. A movement towards free international movement of capital would lead to a(n) __________ in the return to capital in Country A and a(n) __________ in the return to capital in Country B. |
| | A) | decrease; decrease |
| | B) | decrease; increase |
| | C) | increase; decrease |
| | D) | increase; increase |
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7 | |
A movement towards free international movement of capital will lead to which of the following effects? |
| | A) | equalization of the rate of return to capital |
| | B) | an increase in world output |
| | C) | an increase in output in each country |
| | D) | all of the above |
| | E) | a and b only |
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8 | |
From the host country's viewpoint, which of the following is not a potential benefit of foreign direct investment? |
| | A) | transfer of new skills and technology |
| | B) | transfer pricing |
| | C) | realization of economies of scale |
| | D) | increased tax revenues |
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9 | |
In the simplest model, migration from a low-wage to a high-wage country leads to |
| | A) | an increase in the wage gap between the two countries. |
| | B) | an increase in output and per-capita output in the high-wage country. |
| | C) | a decrease in output and per-capita output in the low-wage country. |
| | D) | an increase in output, but a decrease in per-capita output in the high-wage country. |
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10 | |
The Economist magazine estimates that, between 1989 and 1998, at least __________ people legally immigrated to both the U.S. and to the European Union each year, and at least __________ additional persons each year migrated to each destination illegally. |
| | A) | 500,000; 1,000,000 |
| | B) | 500,000; 5,000,000 |
| | C) | 1,000,000; 5,000,000 |
| | D) | 1,000,000; 500,000 |
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