Question : 91.According to the free market view, how does FDI increase : 1299334

91.According to the free market view, how does FDI increase the efficiency of world economy through MNEs? 

A. The MNE is an instrument for dispersing the production of goods and services to the most efficient locations around the globe.

B. MNEs extract profits from the host country and take them to their home country and help all countries realize economies of scale.

C. When an MNE produces products, profits from the investment go abroad, and hence the MNE helps foreign exchange to rotate.

D. A foreign-owned manufacturing plant may import many components from its home country, thus improving the balance of payments of the host country.

E. MNEs increase the efficiency of world economy by increasing the flow of capital in the world market.

92.Which of the following statements regarding the free market view is true? 

A. According to the free market view, MNEs decrease the overall efficiency of the world economy.

B. No country has adopted the free market view in its pure form.

C. According to the free market view, MNEs can never be instruments of economic development, only of economic domination.

D. According to the free market view, FDI is beneficial to the host country of an MNE but it is harmful for the home country of the MNE.

E. The free market view traces its roots to Marxist political and economic theory.

93.Britain reserves the right to intervene in FDI by: 

A. reserving the right to block foreign takeovers of domestic firms in certain situations.

B. prohibiting FDIs over and above a certain fixed annual amount.

C. nationalizing certain industries that provide essential goods and services.

D. imposing economic sanctions against specific countries.

E. by limiting exports and licensing.

94.The pragmatic nationalist view is that : 

A. FDI benefits only the host country.

B. FDI does not make any positive contribution to the host economy.

C. every country should adopt the free market view.

D. FDI should not be allowed by any country as it is an instrument of economic domination rather than economic development.

E. FDI has both benefits and costs.

95.Many host countries are concerned that a foreign-owned manufacturing plant may import many components from its home country, which has negative implications for the host country’s _____. 

A. free trade agreements

B. inward FDI

C. sovereignty

D. balance-of-payments position

E. gold reserves

96.According to the _____, FDI has both benefits and costs and should be allowed only if the benefits outweigh the costs. 

A. eclectic paradigm theory

B. free market view

C. pragmatic nationalist view

D. radical view

E. internalization theory

97.The tendency to aggressively court FDI believed to be in the national interest of a country is an aspect of: 

A. pragmatic nationalism.

B. the radical view.

C. nationalism.

D. imitative theory.

E. eclectic paradigm.

98.Which of the following is true regarding the pragmatic nationalist view of FDI? 

A. One aspect of pragmatic nationalism is the tendency to aggressively court FDI believed to be in the national interest by, for example, offering subsidies to foreign MNEs in the form of tax breaks or grants.

B. The pragmatic nationalist view states that FDI always has a positive effect on the balance of payments which arises from the outflow of a foreign subsidiary’s earnings and from the import of inputs from abroad.

C. According to pragmatic nationalist view, international production should be distributed among countries based on the theory of comparative advantage.

D. According to pragmatic nationalist view, FDI should not be allowed to enter into a country because its costs always outweigh its benefits.

E. The pragmatic nationalist view of FDI accepts the Marxist theory, and suggests that FDI by MNEs is an instrument of imperialism.

99.Offering subsidies to foreign MNEs in the form of tax breaks or grants is one way of: 

A. adopting a retaliatory stance in bilateral trade.

B. courting FDI believed to be in national interest.

C. adopting a radical stance to FDI.

D. blocking FDI inflows into the country.

E. curbing a trade war.

100.The main benefits of inward FDI for a host country arise from:  

A. the resource-transfer effect, the employment effect, and the balance-of-payments effect.

B. the labor-transfer effect, the technology effect, and the currency-exchange effect.

C. the cultural awareness effect, first-mover advantage effect, and economic development effect.

D. the foreign exchange reserves effect, knowledge flow effect, and the reverse resource transfer effect.

E. the employment effect, the labor-transfer effect, and the technology effect.