The lowering of trade and investment barriers: protects domestic industries from foreign competition. was not an agenda of the Uruguay Round. allows firms to base production at optimal locations outside their home country. creates an unfavorable environment for FDI.
II. Choise answer,
( ) 1. The lowering of trade and investment barriers:
- protects domestic industries from foreign competition.
- was not an agenda of the Uruguay Round.
- allows firms to base production at optimal locations outside their home country.
- creates an unfavorable environment for FDI.
( ）2. Which of the following is an advantage of choosing exporting as a mode of entry
into foreign markets?
- A firm can avoid the cost of establishing manufacturing operations in the host country.
- A firm shares the development costs and risks with its host partner.
- A firm can earn returns from process technology skills in countries where FDI is restricted.
- A firm has access to local partner's knowledge.
( )3. n which of the following modes of entry into foreign markets does a firm agree to set up an operating plant for a foreign client and hand over the plant when it is fully operational?
- Franchising agreement B. Turnkey project
- Licensing agreement D. Wholly owned subsidiary
( )4. Which of the following creates an unfavorable environment for innovations and entrepreneurship?
- Market economy B. Economic freedom
- tate
monopoly in production D. Privatization
( )5.Which of the following involves granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit sold?
- Outsourcing B. Exporting C. Licensing D. Diverging
( )6. When Shop Smart opened its first super market in China it was unable to generate any sales. After conducting a research, it was understood that the local sales personnel found it difficult to communicate with the American store managers. In addition, Chinese consumers found it difficult to shop in the American way. Shop Smart's failure in China can be attributed to the lack of:
- cross-cultural literacy. B. class consciousness.
- a first-mover advantage. D. Confucian dynamism.
( )7.Which of the following is one of the limitations of exporting that leads companies to prefer FDI over exporting?
- The presence or threat of trade barriers
- The costs of acquiring a foreign enterprise
- The costs of establishing production facilities in a foreign country
- The risk of giving away valuable technological know-how to a potential foreign competitor
( )8. In order to build large production units and expedite certain routine government actions related to this, Scorpius Inc. made legal payments to the government officials of a host nation. Such payments are typically referred to as:
- bribes. B. speed money. C. customs duties. D. excise taxes.
( )9.Axiom International, an Australian company, wants to expand its operations to China, a country that is politically, culturally, and economically different. The firm needs to select a mode of entry that would give it access to local knowledge, allow sharing of development costs and risks, and also be politically acceptable. Which of the following modes of entry into foreign markets is most suitable for Axiom International?
- Wholly owned subsidiary B. Joint venture
- Exporting D. Greenfield investments
( )10. Which of the following is true regarding the inflow of FDI?
- Even though developing nations still account for the largest share of FDI inflows, FDI into developed nations has increased markedly.
- Africa has historically been the largest recipient of inward FDI.
- The United Kingdom and France have historically been the smallest recipients of inward FDI.
- There has been an increase in the importance of China as a recipient of FDI.
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