Economics study desk with supply and demand curves, scales and an economic city model

Focused topic practice

international factor movements and multinational corporations MCQs

Practise focused international factor movements and multinational corporations questions with marked answers for exam preparation and subject revision.

international factor movements and multinational corporations Mcqs
1. Guest worker programs usually result in temporary migration of workers from ?
comments icon0
A. impoverished countries to wealthy countries

B. wealthy countries to wealthy countries

C. impoverished countries to impoverished countries

D. wealthy countries to impoverished countries

2. Firms undertake multinational operations in order to ?
comments icon0

A. obtain necessary factor inputs

B. hire low-income workers

C. All of the above

D. manufacture in nations they have difficult exporting to

3. Accusations of American labor unions against U.S multinational firms include all of the following except ?
comments icon0

A. export jobs by shifting technology overseas

B. export jobs by shifting investment overseas

C. enjoy unfair advantage in taxation

D. operating at output levels where scale economies occur
4. Multinational corporations ?
comments icon0

A. always enjoy political harmony in nations where their subsidiaries operate

B. increase the transfer of technology between nations

C. require governmental subsidies in order to conduct worldwide operations

D. make it harder to nations to foster activities of comparative advantage

5. International joint ventures can lead to welfare losses when the newly established firm ?
comments icon0
A. gives rise to increased amounts of market power

B. enters markets neither parent could have entered individually

C. yields cost reductions unavailable to parent firms

D. adds to the pre-existing productive capacity

6. The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless offset by cost reductions. Which type of cost reduction would not lead to offsetting welfare gains for the overall economy ?
comments icon0
A. lower wages extracted from workers

B. R&D generating welfare improved technology

C. development of more productive machinery

D. new work rules promoting workers efficiency

7. Which of the following is not an example of foreign direct investment ?
comments icon0
A. the purchase of bonds or stock issued by a textile company overseas

B. the acquisition of an existing steel mill overseas

C. the creation of a wholly owned business firm overseas

D. the construction of a new auto assembly plant overseas

8. American labor unions have maintained that U.S multinational corporations have been ?
comments icon0
A. exporting American jobs by investing overseas

B. importing cheap foreign workers by keeping U.S investment at home

C. importing cheap foreign workers by shifting U.S investment overseas

D. exporting American jobs by keeping investment in the U.S

9. The migrations of electricians from low-paying nations to high-paying nations is most likely to be challenged by ?
comments icon0

A. electrician employers in the high-paying nations

B. electrician unions in the low paying nations

C. electrician unions in the high-paying nations

D. electricians who stay in the low paying nations

10. Which business device involves the creation of a new business by two or more companies often for a limited period of time ?
comments icon0

A. horizontal merger

B. multinational corporation

C. vertical merger

D. international joint venture
11. ________ refers to the price charged for products sold to a subsidiary to a multinational corporation b another subsidiary in another country?
comments icon0

A. marginal cost pricing

B. full cost pricing

C. transfer pricing

D. price discrimination

12. The migration of employable workers from low-paying nations to high-paying nations tends to decrease ?
comments icon0

A. total wage income in the world

B. business or capitalist income in the world

C. wage disparities

D. the productivity of labor

13. The migration of employable workers from low-paying nations to high-paying nations will ?
comments icon0
A. increase business or capitalist incomes in the high-paying nations

B. increase business or capitalist incomes in the low-paying nations

C. decrease wage rates in the low-paying nations

D. decrease productivity and real output in the world

14. All of the following are potential advantages of an international joint venture except ?
comments icon0
A. operating at diseconomy-of-scale output levels

B. sharing research and development cost among corporations

C. establishing work rules promoting higher labor productivity

D. forestalling protectionism against imports

15. Multinational corporations face problems since they ?
comments icon0
A. may raise political problems in countries where their subsidiaries operate

B. cannot benefit from the advantage of comparative advantage

C. can only invest at home but not overseas

D. can only invest overseas but not at home

16. Multinational corporations ?
comments icon0

A. always produce primary goods

B. None of the above

C. always produce manufactured goods

D. produce primary goods or manufactured goods
17. ____ was a strategy for industrial development popular in Latin America in the 1950s 1 1960s for promoting domestic production by erecting high protective tariffs on imports of manufactured goods ?
comments icon0

A. countervailing duties

B. dynamic hedging

C. export led growth

D. import substitution