International Factor Movements And Multinational Corporations(Economics ) Questions and Answers

Question 1. Guest worker programs usually result in temporary migration of workers from ?
  1.    impoverished countries to impoverished countries
  2.    impoverished countries to wealthy countries
  3.    wealthy countries to wealthy countries
  4.    wealthy countries to impoverished countries
Explanation:-
Answer: Option B. -> impoverished countries to wealthy countries
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. International joint ventures can lead to welfare losses when the newly established firm ?
  1.    adds to the pre-existing productive capacity
  2.    enters markets neither parent could have entered individually
  3.    yields cost reductions unavailable to parent firms
  4.    gives rise to increased amounts of market power
Explanation:-
Answer: Option D. -> gives rise to increased amounts of market power
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. Accusations of American labor unions against U.S multinational firms include all of the following except ?
  1.    enjoy unfair advantage in taxation
  2.    export jobs by shifting technology overseas
  3.    export jobs by shifting investment overseas
  4.    operating at output levels where scale economies occur
Explanation:-
Answer: Option D. -> operating at output levels where scale economies occur
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. The migration of employable workers from low-paying nations to high-paying nations will ?
  1.    decrease wage rates in the low-paying nations
  2.    decrease productivity and real output in the world
  3.    increase business or capitalist incomes in the high-paying nations
  4.    increase business or capitalist incomes in the low-paying nations
Explanation:-
Answer: Option C. -> increase business or capitalist incomes in the high-paying nations
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. The migrations of electricians from low-paying nations to high-paying nations is most likely to be challenged by ?
  1.    electrician unions in the high-paying nations
  2.    electrician unions in the low paying nations
  3.    electrician employers in the high-paying nations
  4.    electricians who stay in the low paying nations
Explanation:-
Answer: Option A. -> electrician unions in the high-paying nations
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. Multinational corporations ?
  1.    increase the transfer of technology between nations
  2.    make it harder to nations to foster activities of comparative advantage
  3.    always enjoy political harmony in nations where their subsidiaries operate
  4.    require governmental subsidies in order to conduct worldwide operations
Explanation:-
Answer: Option A. -> increase the transfer of technology between nations
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. ____ was a strategy for industrial development popular in Latin America in the 1950s 1 1960s for promoting domestic production by erecting high protective tariffs on imports of manufactured goods ?
  1.    export led growth
  2.    import substitution
  3.    dynamic hedging
  4.    countervailing duties
Explanation:-
Answer: Option B. -> import substitution
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. All of the following are potential advantages of an international joint venture except ?
  1.    sharing research and development cost among corporations
  2.    forestalling protectionism against imports
  3.    establishing work rules promoting higher labor productivity
  4.    operating at diseconomy-of-scale output levels
Explanation:-
Answer: Option D. -> operating at diseconomy-of-scale output levels
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. Which of the following is not an example of foreign direct investment ?
  1.    the construction of a new auto assembly plant overseas
  2.    the acquisition of an existing steel mill overseas
  3.    the purchase of bonds or stock issued by a textile company overseas
  4.    the creation of a wholly owned business firm overseas
Explanation:-
Answer: Option C. -> the purchase of bonds or stock issued by a textile company overseas
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. Multinational corporations face problems since they ?
  1.    cannot benefit from the advantage of comparative advantage
  2.    may raise political problems in countries where their subsidiaries operate
  3.    can only invest at home but not overseas
  4.    can only invest overseas but not at home
Explanation:-
Answer: Option B. -> may raise political problems in countries where their subsidiaries operate
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
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