Economics MCQs

Page No. 229

All of the following are potential advantages of an international joint venture except ?


asharing research and development cost among corporations


b forestalling protectionism against imports


cestablishing work rules promoting higher labor productivity


doperating at diseconomy-of-scale output levels



____ 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 ?


aexport led growth


b import substitution


cdynamic hedging


dcountervailing duties



Which of the following is not an example of foreign direct investment ?


a the construction of a new auto assembly plant overseas


bthe acquisition of an existing steel mill overseas


cthe purchase of bonds or stock issued by a textile company overseas


d the creation of a wholly owned business firm overseas



________ refers to the price charged for products sold to a subsidiary to a multinational corporation b another subsidiary in another country?


amarginal cost pricing


bfull cost pricing


cprice discrimination


d transfer pricing


View Answer transfer pricing

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


amultinational corporation


b international joint venture


chorizontal merger


d vertical merger



American labor unions have maintained that U.S multinational corporations have been ?


aexporting American jobs by investing overseas


bexporting American jobs by keeping investment in the U.S


cimporting cheap foreign workers by shifting U.S investment overseas


dimporting cheap foreign workers by keeping U.S investment at home



Firms undertake multinational operations in order to ?


ahire low-income workers


b manufacture in nations they have difficult exporting to


cobtain necessary factor inputs


d All of the above


View Answer All of the above

The migration of employable workers from low-paying nations to high-paying nations tends to decrease ?


atotal wage income in the world


bwage disparities


cbusiness or capitalist income in the world


dthe productivity of labor


View Answer wage disparities

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 ?


aR&D generating welfare improved technology


bdevelopment of more productive machinery


cnew work rules promoting workers efficiency


dlower wages extracted from workers



If a person can be prevented from using a good, the good is said to be ?


aexcludable


b a common resource


ca public goods


drival


View Answer excludable

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