Mid SEM IB Policy A222

The ....................... is a leading indicator. It’s also the indicator that most people look to FIRST, even though it’s not the most important indicator.

• stock market

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Balance of Trade

The Greek debt crisis originated from heavy government spending and problems escalated over the years due to slowdown in global economic growth. External debt is crucial when considering whether the MNC should invest in the country.

• True

• False

Currency volatility is always a concern for companies operating overseas. Changes in local currency values can erode earnings in USD or other hard currency even if in-market sales targets are met. The condition is important for companies and shareholders as it effect the markets in which they do business in sense of the following EXCEPT:

• Slower growth in emerging markets

• Changes in consumer preferences and behavior

• Better revenue in USD

• Lower hard-currency earnings for emerging markets

In general, a weaker currency makes imports more .........................., while stimulating exports by making them ........................... for overseas customers to buy.

• expensive/cheaper

• cheaper/expensive

Formulating and developing a favorable economic goals of a country would guarantee a healthy business environment for MNCs.Goals of economic policy include as follows EXCEPT:

• Economic growth

• Reduce operation cost

• Full employment

• Price stability

GDP is an estimate of the total value of all goods and services produced within a nation for a set period, usually .................. . Strong GDP is among attractive factors for MNC.

• quarterly

• a year

• bi-annually

• 5 years

PPI is a coincident indicator that tracks price changes in almost all goods-producing sectors, including mining, manufacturing, agriculture, forestry and fishing. Thus, it is an important factor that MNC should consider when selecting investment destination.

• True

• False

Russia does not have elections thus not a good country for FDI.

• True

• False

Multinational corporation (MNC) mostly avoid investing in ..................... countries because

power maintained by suppression of opposition. Thus, the policy regarding foreign investment keep changing without considering the interest and ............... of the MNC towards the country.

• democratic, contribution

• theocratic, amount of investment

• totalitarian, contribution

There are 374 TV channels in ................ but like the print media, TV programmes and news content is state controlled. This business environment is not conducive for most MNCs.

• South Korea

• China

• South Africa

• Oman