Trade week 1 intro

1. Which of the following is not within the definition of globalization?

• American firms establishing production facilities in Europe in the nineteenth century

• British investors financing the Argentinian railroad

• British colonization of India

• Chinese workers migrating to the US to work on building the railroad

The definition of an “open” economy is the

• Sum of exports and imports as a percentage of GNP

• Exports minus imports as a percentage of GNP

• Exports plus imports

• Exports minus imports

If Credit Suisse buys mortgage-backed securities issued by Morgan Stanley, then from the US point of view this would be called

• Inward FDI

• Outward FDI

• Inward Portfolio Investment

• Outward Portfolio Investment

If Hewlett-Packard opens a factory in Singapore, which it owns wholly, then from the US point of view this would be called

• Inward FDI

• Outward FDI

• Inward FPI

• Outward FPI

Which of the following activities is not equivalent to importing workers to perform the respective activity in the US?

• Dell undertaking FDI in China to assemble laptops for the US market

• Nike contracting to make sneakers in Bangladesh to import into the US

• GM making cars in China to sell cars in China

• HP setting up a call center in India to handle customer services

Because of Covid-19, if China has a macroeconomic crisis nowadays, that will get transmitted to a reduction in world trade because

• China firms will cut back on Outward FDI

• Foreign firms will cut back on undertaking FDI in China

• The reduction in demand or supply in China will be transmitted across countries through the international supply chains

• Foreigners will buy less goods from China