ECO 305 Week 7 Quiz StrayerClick on the Link Below to Purchase ! "ra#e# Course $aterialhtt%&''hw(ala)co*'ECO+305+Week+7+Quiz+Strayer+3,-)ht*Quiz , Cha%ter ./01E201/O0L 3C1O2 $O4E$E01S 05 $6L1/01/O0L E01E2P2/SES$6L1/PLE C7O/CE1. "Risk spreading" is a motive most likely to be served when firms undergo:a. Horizontal integrationb. Vertical integrationc. onglomerate integrationd. !one of the above ". #he source $home% location of most of the world&s leading multinational enterprises is:a. !orth 'merica and (uropeb. !orth 'merica and 'siac. (urope and )outh 'mericad. (urope and 'sia *. +hich type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods,a. -orward vertical integrationb. .ackward vertical integrationc. -orward horizontal integrationd. .ackward horizontal integration /. )uppose that an 'merican automobile manufacturer establishes foreignsubsidiaries to market the automobiles. #his practice is referred to as:a. -orward vertical integrationb. -orward conglomerate integrationc. .ackward vertical integrationd. .ackward conglomerate integration 0. )uppose that a steel manufacturer head1uartered in 2apan sets up a subsidiary in anada to produce steel. #his practice is referred to as:a. onglomerate integrationb. -orward vertical integrationc. .ackward vertical integrationd. Horizontal integration 3. 4uring the 1567s8 'merican oil companies ac1uired nonenergy companies $e.g.8 copper8 auto components% in response to anticipated decreases in investment opportunities in oil. #his type of diversification is referred to as:a. Horizontal integrationb. onglomerate integrationc. -orward vertical integrationd. .ackward vertical integration 6. +hich of the following best refers to the outright construction or purchase abroad of productive facilities8 such as manufacturing plants8 by domestic residents,a. 4irect investmentb. 9ortfolio investmentc. )hort:term capital investmentd. ;ong:term capital investment .). direct investment abroad hasoccurred in:a. entral 'mericab. )outh 'mericac. (uroped. 2apan 5. =n recent years8 most foreign direct investment in the >nited )tates has come from:a. +estern (uropeb. entral 'mericac. )outh 'mericad. 'sia 17. ?ost >.). direct investment abroad occurs in:a. ommunicationsb. 9etroleumc. -inance and insuranced. ?anufacturing 11. ?ost foreign direct investment in the >nited )tates occurs in:a. 9ublic utilitiesb. ommunicationsc. ?anufacturingd. ?ining and smelting 1". +hich of the following is not a significant motive for the formation of multinational enterprises,a. 'voiding tariffs by obtaining foreign manufacturing facilitiesb. @btaining the benefits from overseas comparative advantagesc. #he ac1uisition of natural resource supply sourcesd. )ubsidies granted by the home government to overseas corporations 1*. )uppose Aeneral ?otors charges its ?eBican subsidiary C1 million for auto assembly e1uipment that could be purchased on the open market for C.). firmsd. 'nticipations of future reductions in >.). tariff levels 1nited ?otor ?anufacturing o.,a. ?ultinational enterpriseb. =nternational Doint venturec. ?ultilateral contractd. =nternational commodity agreement "". ?ultinational enterprises:a. =ncrease the transfer of technology between nationsb. ?ake it harder for nations to foster activities of comparative advantagec. 'lways enDoy political harmony in nations where their subsidiaries operated. Re1uire governmental subsidies in order to conduct worldwide operations "*. -irms undertake multinational operations in order to:a. Hire low:wage workersb. ?anufacture in nations they have difficulty eBporting toc. @btain necessary factor inputsd. 'll of the above "/. ?ultinational enterprises face problems since they:a. annot benefit from the advantages of comparative advantageb. ?ay raise political problems in countries where their subsidiaries operatec. an invest only at home8 but not overseasd. an invest only overseas8 but not at home "0. 'merican labor unions have recently maintained that >.). multinational enterprises have been:a. (Bporting 'merican Dobs by investing overseasb. (Bporting 'merican Dobs by keeping investment in the >nited )tatesc. =mporting cheap foreign workers by shifting >.). investment overseasd. =mporting cheap foreign workers by keeping >.). investment at home "3. 'merican labor unions accuse >.). multinational firms of all of the following eBcept: that such firmsa. (nDoy unfair advantages in taBationb. (Bport Dobs by shifting technology overseasc. (Bport Dobs by shifting investment overseasd. @perate at output levels where scale economies occur "6. +hich of the following refers to the price charged for products sold to a subsidiary of a multinational enterprise by another subsidiary in another nation,a. #ransfer pricingb. =nternational dumpingc. 9rice discriminationd. -ull:cost pricing ".). capital owners e1uals:a. C*b. C3c. C5d. C1" /7. onsider -igure 5.". =f ?eBican migration to the >nited )tates results in the labor force increasing to * workers8 denoted by schedule )18 the:a. +age rate for native >.). workers decreases and the payments to >.). capital owners increasesb. +age rate for native >.). workers decreases and the payments to >.). capital owners decreasesc. +age rate for native >.). workers increases and the payments to >.). capital owners increasesd. +age rate for native >.). workers increases and the payments to >.). capital owners decreases /1. onsider -igure 5.". 's the result of the ?eBican migration to the >nited )tates:a. >.). capital owners loseb. !ative >.). workers losec. >.). capital owners and native >.). workers losed. >.). capital owners and native >.). workers gain /". onsider -igure 5.". 9olicies that permit ?eBican workers to freely migrate to the >nited )tates would likely be resisted by:a. >.). capital ownersb. !ative >.). workersc. >.). capital owners and native >.). workersd. !either >.). capital owners nor native >.). workers /*. HHHH refers to highly educated and skilled people who migrate from poor developing countries to wealthy industrial countries.a. 4irect investmentb. 9ortfolio investmentc. #ransfer pricingd. .rain drain //. "Auest worker" programs generally result in temporary migration of workers from:a. +ealthy nations to wealthy nationsb. +ealthy nations to impoverished nationsc. =mpoverished nations to wealthy nationsd. =mpoverished nations to impoverished nations /0. ?eBico&s HHHH refer to an assemblage of >.).:owned companies that use >.).:owned parts and ?eBican assembly to manufacture goods that are eBported to the >nited )tates.a. ?ultinational corporationsb. =nternational Doint venturesc. ?a1uiladorasd. #ransplants /3. ritics of >.). trade and immigration policy maintain thata. =t has depressed wages for many 'mericansb. =t has increased the supply of less educated workers in the >nited )tatesc. =t has an adverse impact on the employment opportunities of less:skilled8 'merican workersd. 'll of the above /6. 'merican critics of >.). multinational enterprises contend that they promotea. Runaway Dobsb. #echnology transfers abroadc. #aB evasiond. 'll of the above /.). firm would profit by establishing a anadian manufacturing subsidiary or licensing rights to a anadian firm to manufacture and sell its product in anada. 10. #here is virtually universal agreement among economists that foreign direct investment in the >nited )tates has reduced the economic welfare of the average >.). citizen. 13. -oreign:owned companies in the >nited )tates operate under more strict antitrust8 environmental8 and other regulations than >.).:owned companies. 16. 4uring the 15nited )tates known as "transplants." 1nited )tates8 2apanese automakers were able to avoid eBport restrictions imposed by the 2apanese government8 but not import restrictions imposed by the >.). government. 15. ?ergers differ from Doint ventures in that they involve the creation of anew business firm8 rather than the union of two eBisting companies. "7. 4eveloping countries8 such as ?eBico and =ndia8 often close their borders to foreign companies unless they are willing to take on partner companies in developing countries. "1. =n natural:resource oriented industries8 such as oil and copper8 Doint ventures have often been formed by several companies since the cost of resource:eBtraction may be prohibitively large for a particular company. "". =nternational Doint ventures tend to yield a welfare increasing market:power effect and a welfare decreasing cost:reduction effect. "*. ' Doint venture leads to increases in national welfare if the cost:reduction effect is due to wage concessions and if it more than offsets the market:power effect. "/. ' Doint venture leads to increases in national welfare if its cost:reduction effect is due to productivity gains and if it more than offsets the market:power effect. "0. 2oint ventures lead to losses in national welfare when the newly established business adds to pre:eBisting production capacity and fosters additional competition. "3. 2oint ventures lead to national welfare gains if the newly established business yields productivity increases that would have been unavailable if each parentperformed the same function separately. "6. ' Doint venture along two large competing companies tends to yield a market:power effect8 which results in a reduction in consumer surplus8 that is not offset by a corresponding gain to producers. ".).:owned companies that combine ?eBican parts and >.). assembly to manufacture goods that are eBported to ?eBico. **. @pposition to ?eBico&s ma1uiladoras has come from >.). labor unionswhich claim that ma1uiladoras have resulted in Dob losses for >.). workers. */. 's workers migrate from low:wage ?eBico to high:wage >nited )tates8 wages tend to rise in ?eBico and fall in the >nited )tates. *0. #he migration of workers from ?eBico to the >nited )tates tends to eBert downward pressure on the wages of native >.). workers that compete against ?eBican workers for Dobs. *3. #he effect of workers migrating from low:wage ?eBico to high:wage >nited )tates is to redistribute income from capital to labor in the >nited )tates and from labor to capital in ?eBico. *6. =n the >nited )tates8 labor unions have generally resisted efforts to implement restrictions on the number of foreigners allowed into the country. *nited )tates has discouraged the "brain drain" problem by permitting the immigration of unskilled workers while restricting the immigration of skilled persons. /7. ;abor migration tends to increase output and decrease wages in the country of immigration while decreasing output and increasing wages in the country of emigration. S7O21 0SWE21. +hat are the typical ways in which multinational enterprises have diversified their operations,". +hat are ?eBican ma1uiladoras,ESS81. 're there any differences between the theory of multinational enterprises and conventional trade theory,". +hat are the disadvantages of forming Doint ventures,