Review Flashcard for Chapter 7

Front

The purchase of physical assets or a significant amount of ownership of a company in another country to gain a measure of management control is called ________.

Back

foreign direct investment

Front

________ is an investment that does not involve obtaining a degree of control in a company.

Back

Portfolio investment

Front

Which of the following is a major driver of foreign direct investment? vertical integration, horizontal integration, globalization, cultural diversity

Back

globalization

Front

A(n) ________ advantage is the one that a company gains from incorporating a business activity within itself rather than leaving it to a relatively inefficient market.

Back

internalization

Front

Exports and imports of tourism and business consulting are included in the ________ account of a country's balance of payments.

Back

services

Front

Exports and imports of tangible goods are included in the ________ account of a country's balance of payments.

Back

merchandise

Front

Exports and imports of computer software, electronic components, and apparel are included in the ________ account of a country's balance of payments.

Back

merchandise

Front

When a U.S. company buys shares of stock in a French company on France's stock market, the U.S. balance of payments records the transaction as an ________.

Back

outflow of capital with a minus sign

Front

Blickinstock has identified a company that it can acquire or merge with. Which of the following statements would represent the least likely reason for Blickinstock to go ahead with the merger? The merger would help increase Blickinstock's global competitiveness. The merger would allow the company to get a foothold in the nascent Latin American market. The merger would help to fill the gaps in Blickinstock's product line. The merger would bring in increased cash-flows that Blickinstock can use to acquire other firms.

Back

The merger would bring in increased cash-flows that Blickinstock can use to acquire other firms.

Front

If board members ask about the maquiladora industry, Keith would explain that it refers to ________.

Back

the low-wage, 130-mile-wide strip along the U.S.-Mexico border that comprises a special economic region