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Unit 2: Foreign Direct Investment - Group 3

Total questions: 15

Worksheet time: 5mins

Name
Class
Date
1.

_______ influence how international companies operate in host nations.

a)

Tax breaks

b)

Financial incentives

c)

Grant loans

d)

Performance demands

2.

The ____ states that firms undertake foreign direct investment when the features of a particular location combine with ownership and internalization advantage to make a location appealing for investment.

a)

Eclectic theory

b)

International product life cycle theory

c)

Internalization

d)

Market power theory

3.

Which of these are the main reasons that account for the growth of FDI flows over the past decade?

a)

Diversity and globalization

b)

Diversity and telecommunications

c)

Globalization and mergers and acquisitions

d)

Telecommunications

4.

The purchase of physical assets or a significant amount of ownership of a company in another country to gain a degree of management control is referred to as _____

a)

Portfolio investment

b)

Vertical integration

c)

Foreign direct investment

d)

Mergers

5.

In the _______ product stage, the company directly invests in production facilities in those countries where demand is great enough to warrant its own production facilities

a)

New

b)

Declining

c)

Maturing

d)

Standardized

6.

Financial incentives include all of these except

a)

Cash grant

b)

Lower tax rates

c)

Infrastructure improvements

d)

Low-interest loan

7.

In which of these stages is a good produced in the home country because of uncertain domestic demand and to keep production close to the research department?

a)

The new product stage

b)

The standardized product stage

c)

The maturing product stage

d)

The declining product stage

8.

Which of these methods can a home country use to promote FDI?

a)

Outright sanctions

b)

Grant loans

c)

Infrastructure improvements

d)

Ownership restrictions

9.

Which of these is a market imperfection?

a)

Portfolio investment

b)

PI

c)

Greenfield barrier

d)

Trade barriers

10.

Which of these activities is recorded as a reduction in the balance of payments account?

a)

Undertake FDI

b)

Exports of goods and services

c)

Receive FDI

d)

Transfers from abroad

11.

Which of these is a reason for home country intervention in FDI flows?

a)

Receive advanced technology from other countries

b)

Protect their balance of payment

c)

Improve management skills

d)

Job creation

12.

Which of these methods can a home country use to restrict outward FDI flows?

a)

Tax breaks

b)

Sanctions

c)

Political pressure

d)

Performance demands

13.

In 2022, which countries is the largest foreign direct investor in Vietnam?

a)

South Korean

b)

Japan

c)

Singapore

d)

China

14.

Which of these is a reason for host country intervention in FDI flows?

a)

It sends resources out of the home country

b)

Loss of jobs

c)

Access to technology

d)

Increase balance of payment deficit

15.

Applying political pressure is the method of _____ country to ______ FDI.

a)

host – restrict

b)

home – promote

c)

home – restrict

d)

host - promote