QUESTION 1

Within the context of FPI, _____ rights are the rights to appoint key managers and
establish control mechanisms.
- management control

QUESTION 2

Picnia Corp., a leading automobile manufacturing company, assembles its cars in

Deltaland, but the components are manufactured in Ristasia. In this scenario,
Picnia Corp. has engaged in:
- upstream vertical FDI

QUESTION 3

The Bretton Woods system came to an end because:

- of a combination of rising productivity elsewhere and US inflationary policies.

QUESTION 4

Mexico recently printed more currency, causing the supply of the peso to increase
while demand stayed the same. Which of the following is NOT a likely outcome of
this scenario?
- inevitable investor sell-offs will cause the appreciation of the peso

QUESTION 5

When one firm enters a foreign country through foreign direct investment (FDI), its
rivals are likely to follow by undertaking additional FDI in a host country to:
- acquire location advantages.

QUESTION 6

In the context of foreign exchange rate, a(n) _____ is an increase in the value of
a currency.
- appreciation

QUESTION 7

Citronix Inc. is a semiconductor manufacturing company with its headquarters in

Bigania. In its venture to expand business, the company sets up manufacturing units
in five other countries where semiconductors are produced and manufactured. In this
scenario, Citronix Inc. is engaged in _____.
- FDI

QUESTION 8
HiSpark Inc., a leading sports accessories brand, believes that it has to possess
rare, hard-to-imitate technology, valuable brand name, and organizationally
embedded culture to achieve consistent success as a multinational enterprise. In
this case, HiSpark Inc. is focusing on:
- ownership advantage.

QUESTION 9

In a fixed exchange rate policy, which of the following involves setting the
exchange rate of the domestic currency in terms of another currency?
- Pegging
QUESTION 10

According to the economic theory, which of the following factors determines a

commodity’s price?
- supply and demand

QUESTION 11

In the context of foreign direct investment, which of the following statements is

true of ownership advantages?
- Firms can beat rivals abroad by acquiring the advantage of proprietary technology
of manufacturing products

QUESTION 12

_____ refers to the domestic diffusion of foreign technical knowledge and

processes.
- Technology spillover

QUESTION 13

Knowledge that can be written down and transferred without losing much of its
richness is called _____.
- explicit knowledge

QUESTION 14

_____ refers to a transaction that protects traders and investors from exposure to
the fluctuations of the spot rate.
- currency hedging

QUESTION 15

Which of the following statements is true of the relationship between a commodity’s

supply and demand?
- Oversupply of a commodity will result in price drops.