WorksheetsUnit 2 - Foreign Direct Investment
Total questions: 10
Worksheet time: 5mins
More expansion of foreign direct investment (FDI) can boost:
Employment
Unemployment
Money circulation
Demand
What is the relationship between foreign direct investment (FDI) and Multinational Corporations (MNCs)?
A MNC is never involve FDI
FDI is never done by MNCs
MNCs involve FDI
All FDI is done by MNCs
A company that establishes a new operation in a foreign country has made:
An acquisition
A merger
A greenfield investment
A brownfield investment
Benefit of foreign direct investment (FDI) include all of the following EXCEPT:
The resource transfer effect
The employment effect
The balance of payments effect
National sovereignty and autonomy
Which of the following methods would NOT attract FDI into a country?
Tax breaks and subsidies
Grants and low interest loans
Relaxed regulations and reduced restrictions
Political instability and uncertainty
When Multinational Corporations (MNCs) set up in new countries, they may use legal creative accounting to minimize the tax burden in the recipient countries (host countries). This is an example of:
Tax avoidance
Tax evasion
Repatriation
Moving profit abroad
Tax assistance
Select options below that represent reasons for the emergence of Multinational Corporations (MNCs) and Foreign direct investment (FDI):
Higher transport and communication costs
Increase protectionism and trade restrictions
Access to cheap materials
Large customer populations in foreign markets
Which of the following best defines a multinational corporation (MNC)?
A company that exports to many countries.
A large company that import from many countries.
A company that operates in more than two different countries.
A company that produces goods and services for a large market.
Which of the following best describes the term Foreign Direct Investment (FDI)?
When a country makes an investment into a company
When a domestic country invests into its own companies
When a company makes an investment into a foreign country and has right to control
When foreign individuals invest in domestic stock markets
Job creation is a significant advantage for countries that receives FDI. Which situation below indicates that a foreign country has created jobs in the United States?
American car manufacturer Ford closes down its car production plant in Detroit, Michigan and moves to Mexico
Apple partners with electronics producer Foxconn in Shenzhen to produce its iPhone and iPad products
Japanese car manufacturer Honda builds a production plant in Marysville, Ohio and expands to 11 other locations as well
American company Toys R Us closes down its retail stores in the US and starts opening them in China
