Eklavu
CHAPTER 1
Introduction
1.2 The primary objective of the multinational corporation is to a. maximize shareholder wealth b. maximize world production c. minimize debt d. minimize the cost of doing business globally
1.7 ___________ were the earliest multinationals. a. raw-material seekers
b. market seekers
c. cost minimizers
d. oil companies.
1.8 The ___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets.
a. cost minimizers
b. market seekers
c. raw-material seekers
d. whaling companies
1.9 ___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas. a. Cost minimizers
b. Market seekers
c. Raw-material seekers
d. High tech firms
1.13 Into which category of multinational is IBM most likely to fall? a. raw materials seeker b. market seeker c. cost minimizer d. all of the above
1.15 The multinational financial system enables companies to a. avoid currency controls b. reduce taxes c. access lower cost financing sources d. all of the above
1.16 An alternative to the set up of an production facility overseas is to license a local firm to manufacture the company’s products. One disadvantage of this method is
a. the establishment of a competitor with loss of future revenues to the licensing firm
b. the time to market entry
c. the degree of financial and legal risks
d. the amount of the investment required
1.19 Which of the following theories identifies specialization as the main reason for international business activity? a. product life cycle theory of international trade b. theory of diversification c. doctrine of comparative advantage d. theory of globalization
1.21 Multinational firms would most likely be
a. riskier than purely domestic firms because of the exposures of operating abroad
b. less risky than purely domestic firms because of international
Introduction
1.2 The primary objective of the multinational corporation is to a. maximize shareholder wealth b. maximize world production c. minimize debt d. minimize the cost of doing business globally
1.7 ___________ were the earliest multinationals. a. raw-material seekers
b. market seekers
c. cost minimizers
d. oil companies.
1.8 The ___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets.
a. cost minimizers
b. market seekers
c. raw-material seekers
d. whaling companies
1.9 ___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas. a. Cost minimizers
b. Market seekers
c. Raw-material seekers
d. High tech firms
1.13 Into which category of multinational is IBM most likely to fall? a. raw materials seeker b. market seeker c. cost minimizer d. all of the above
1.15 The multinational financial system enables companies to a. avoid currency controls b. reduce taxes c. access lower cost financing sources d. all of the above
1.16 An alternative to the set up of an production facility overseas is to license a local firm to manufacture the company’s products. One disadvantage of this method is
a. the establishment of a competitor with loss of future revenues to the licensing firm
b. the time to market entry
c. the degree of financial and legal risks
d. the amount of the investment required
1.19 Which of the following theories identifies specialization as the main reason for international business activity? a. product life cycle theory of international trade b. theory of diversification c. doctrine of comparative advantage d. theory of globalization
1.21 Multinational firms would most likely be
a. riskier than purely domestic firms because of the exposures of operating abroad
b. less risky than purely domestic firms because of international