Chapter 7 International Factor Movements
? Multiple Choice Questions
1.
Which of the following differs in its essential analytical framework? (a) International trade in goods (b) International conflict resolution (c) International trade in services
(d) International trade in factors of production (e) International borrowing and lending Answer: B 2.
The slope of the production function measures
(a) the physical increase in output as country grows.
(b) the dollar-value increase in output as a country grows.
(c) the increase in number of workers as immigration proceeds. (d) the marginal product of labor. (e) the marginal product of capital. Answer: D
International free labor mobility will under all circumstances (a) increase total world output.
(b) improve the economic welfare of everyone.
(c) improve the economic welfare of workers everywhere.
(d) improve the economic welfare of landlords (or capital owners) everywhere. (e) None of the above. Answer: E
If the world attained a perfect Heckscher-Ohlin model equilibrium with trade, then
(a) workers in the labor abundant country would migrate to the capital abundant country. (b) workers in the labor abundant country would wish to migrate to the capital abundant
country.
(c) workers in the labor abundant country would have no desire to migrate to the capital
abundant country.
(d) workers in the capital abundant country would wish to migrate to the labor abundant
country.
(e) workers in the capital abundant country would migrate to the labor abundant country. Answer: C
3.
4.
5.
During the mass migration period of late 19th-early 20th centuries,
(a) wages rose in the origin countries and fell in the destination countries. (b) wages fell in the origin countries and rose in the destination countries. (c) wages generally rose faster in the origin countries. (d) wages generally rose faster in the destination countries. (e) wages generally fell faster in the origin countries. Answer: C
International borrowing and lending may be interpreted as one form of (a) intermediate trade. (b) inter-temporal trade. (c) trade in services.
(d) unrequited international transfers. (e) None of the above. Answer: B
The relative price of future consumption is (a) the interest rate.
(b) unknown at any given time. (c) the real interest rate. (d) the relative interest rate. (e) None of the above. Answer: C
A country that has a comparative advantage in future production of consumption goods (a) will tend to be an international borrower. (b) will tend to have low real interest rates.
(c) will tend to be an international investor or lender. (d) will tend to have good work ethics. (e) None of the above. Answer: A
A U.S. multinational corporation
(a) has a controlling share in a foreign subsidiary and is not itself foreign controlled. (b) is foreign controlled and has no controlling share in a foreign company.
(c) has a controlling share in a foreign subsidiary and may itself be foreign controlled by a
foreign company.
(d) is a U.S. company whose major markets are outside the United States. (e) None of the above. Answer: C
6.
7.
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9.
10. Why a good is produced in two different countries is known as the question of
(a) internalization. (b) vertical integration. (c) exploitation. (d) location.
(e) None of the above.
Answer: D
11. Internalization deals with the question
(a) why workers prefer to work indoors (b) internationalization
(c) why components are produced by one firm rather than by many. (d) Why a good is produced in two different countries (e) None of the above Answer: C 12. The home location of most of the world’s large multinational companies is
(a) North America and Europe. (b) North America and Asia. (c) Europe and South America. (d) Europe and Asia. (e) None of the above. Answer: A 13. Which of the following best refers to the outright construction or purchase abroad of
productive facilities by domestic residents? (a) Foreign direct investment (b) Portfolio Investment
(c) Short-term capital investment. (d) Long-term capital investment (e) None of the above. Answer: A 14. Most direct investment in the United States has come from
(a) Japan. (b) Canada.
(c) Western Europe. (d) South America. (e) Asia. Answer: C
15. Most U.S. direct foreign investment occurs in
(a) communications. (b) agriculture. (c) petroleum. (d) manufacturing. (e) None of the above.
Answer: D
16. Most foreign direct investment in the United States occurs in
(a) communications. (b) agriculture. (c) petroleum. (d) manufacturing. (e) None of the above. Answer: D
17. Multinational corporations may provide benefits to their home countries for the following
reasons except which one?
(a) Secure raw materials for the source country
(b) Allow for exports of products, which involve company-specific trade secrets
(c) Allow domestic firms to secure timely deliveries of commodities or products, which do not
enjoy a stable or deep market internationally
(d) Shift home country technology overseas via licensing (e) None of the above. Answer: D 18. Trade analysis involving multinational corporations differs from our conventional trade
analysis because multinational corporation analysis involves
(a) absolute cost differentials rather than comparative cost differentials.
(b) the international movement of factor inputs as well as that of finished goods. (c) purely competitive markets rather than imperfectly competitive markets. (d) portfolio investments rather than direct foreign investment. (e) None of the above. Answer: B 19. Direct foreign investment may take any of the following forms except
(a) investors buying bonds of an existing firm overseas. (b) the creation of a wholly owned business overseas. (c) the takeover of an existing company overseas. (d) the construction of a manufacturing plant overseas. (e) None of the above.
Answer: A
20. Which of the following could logically explain why foreign direct investment might be
attracted to the United States?
(a) U.S. wage rates exceeding the productivity of U.S. labor (b) U.S. price ceilings that hold down the price of energy
(c) Especially high price/earning ratios associated with the stock of U.S. firms (d) Anticipations of future reductions in U.S. non-tariff barriers (e) None of the above.
Answer: B
21. Multinational corporations
(a) increase the transfer of technology between nations.
(b) make it harder for nations to foster activities of comparative advantage.
(c) always enjoy political harmony in host countries in which their subsidiaries operate. (d) require governmental subsidies in order to conduct worldwide operations. (e) None of the above.
Answer: A
22. American labor unions have recently maintained that U.S. multinational corporations have
been
(a) exporting American jobs by investing overseas.
(b) exporting American jobs by keeping investment in the United States. (c) importing cheap foreign labor by shifting U.S. investment overseas. (d) importing cheap foreign workers by keeping U.S. investment at home. (e) None of the above. Answer: A 23. Multinational corporations
(a) always produce primary goods.
(b) always produce manufactured goods. (c) always produce services.
(d) may produce primary or manufactured goods. (e) None of the above.
Answer: D
24. ___________ refers to highly educated and skilled people who migrate from poor developing
countries to wealthy industrial countries. (a) Direct investment (b) Portfolio investment (c) Transfer pricing (d) Brain drain
(e) None of the above.
Answer: D
国际经济学作业答案第七章
