International Factor Movements And Multinational Corporations MCQs

Option A: impoverished countries to impoverished countries

Option B: impoverished countries to wealthy countries

Option C: wealthy countries to wealthy countries

Option D: wealthy countries to impoverished countries

Correct Answer: impoverished countries to wealthy countries ✔

Option A: electrician unions in the high-paying nations

Option B: electrician unions in the low paying nations

Option C: electrician employers in the high-paying nations

Option D: electricians who stay in the low paying nations

Correct Answer: electrician unions in the high-paying nations ✔

Option A: decrease wage rates in the low-paying nations

Option B: decrease productivity and real output in the world

Option C: increase business or capitalist incomes in the high-paying nations

Option D: increase business or capitalist incomes in the low-paying nations

Correct Answer: increase business or capitalist incomes in the high-paying nations ✔

Option A: adds to the pre-existing productive capacity

Option B: enters markets neither parent could have entered individually

Option C: yields cost reductions unavailable to parent firms

Option D: gives rise to increased amounts of market power

Correct Answer: gives rise to increased amounts of market power ✔

Option A: enjoy unfair advantage in taxation

Option B: export jobs by shifting technology overseas

Option C: export jobs by shifting investment overseas

Option D: operating at output levels where scale economies occur

Correct Answer: operating at output levels where scale economies occur ✔

Option A: cannot benefit from the advantage of comparative advantage

Option B: may raise political problems in countries where their subsidiaries operate

Option C: can only invest at home but not overseas

Option D: can only invest overseas but not at home

Correct Answer: may raise political problems in countries where their subsidiaries operate ✔

Option A: increase the transfer of technology between nations

Option B: make it harder to nations to foster activities of comparative advantage

Option C: always enjoy political harmony in nations where their subsidiaries operate

Option D: require governmental subsidies in order to conduct worldwide operations

Correct Answer: increase the transfer of technology between nations ✔

Option A: sharing research and development cost among corporations

Option B: forestalling protectionism against imports

Option C: establishing work rules promoting higher labor productivity

Option D: operating at diseconomy-of-scale output levels

Correct Answer: operating at diseconomy-of-scale output levels ✔

1. export led growth
2. import substitution
3. dynamic hedging
4. countervailing duties

Correct Answer: 2. import substitution ✔

Option A: the construction of a new auto assembly plant overseas

Option B: the acquisition of an existing steel mill overseas

Option C: the purchase of bonds or stock issued by a textile company overseas

Option D: the creation of a wholly owned business firm overseas

Correct Answer: the purchase of bonds or stock issued by a textile company overseas ✔

Option A: marginal cost pricing

Option B: full cost pricing

Option C: price discrimination

Option D: transfer pricing

Correct Answer: transfer pricing ✔

Option A: always produce primary goods

Option B: always produce manufactured goods

Option C: produce primary goods or manufactured goods

Option D: None of the above

Correct Answer: produce primary goods or manufactured goods ✔

Option A: multinational corporation

Option B: international joint venture

Option C: horizontal merger

Option D: vertical merger

Correct Answer: international joint venture ✔

Option A: exporting American jobs by investing overseas

Option B: exporting American jobs by keeping investment in the U.S

Option C: importing cheap foreign workers by shifting U.S investment overseas

Option D: importing cheap foreign workers by keeping U.S investment at home

Correct Answer: exporting American jobs by investing overseas ✔

Option A: hire low-income workers

Option B: manufacture in nations they have difficult exporting to

Option C: obtain necessary factor inputs

Option D: All of the above

Correct Answer: All of the above ✔

Option A: total wage income in the world

Option B: wage disparities

Option C: business or capitalist income in the world

Option D: the productivity of labor

Correct Answer: wage disparities ✔

Option A: R&D generating welfare improved technology

Option B: development of more productive machinery

Option C: new work rules promoting workers efficiency

Option D: lower wages extracted from workers

Correct Answer: lower wages extracted from workers ✔