InternationalFinancialManagement_5thEd_Eun_TestBank16

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Unformatted text preview: 16 Student: ___________________________________________________________________________ 1. Under a 1981 Voluntary Trade Agreement Japanese automobile manufacturers were not allowed to increase their exports to the U.S. market. As a result: A. They exited the market B. Honda was motivated to circumvent the trade barriers. C . Honda's FDI may have been part of an overall corporate strategy designed to bolster their competitive position vis--vis their domestic rivals such as Toyota D. Both b) and c) 2. Following Honda's FDI in the U.S. A . The U.S. government imposed a Voluntary Trade Agreement under which Japanese automobile manufacturers were not allowed to increase their exports to the U.S. market. B. Toyota and Nissan made direct investments in America C. Sales of Hondas declined D. none of the above 3. Honda's decision to build a plant in Ohio A. Was welcomed by the United Auto Workers B . Was encouraged by assistance from the state of Ohio, including improved infrastructure around the plant and abatement of property taxes. C. Involved setting up a special foreign trade zone that allowed Honda to import auto parts from Japan at a reduced tariff rate. D. All of the above 4. In the early 1980s, Honda, the Japanese automobile company, built an assembly plant in Marysville, Ohio, and began to produce cars for the North American market. As the production capacity at the Ohio plant expanded, Honda began to export its U.S.-manufactured cars to Japan. A. True B. False 5. When firms undertake FDI? A. They become MNCs B. They reduce their tax rate since they can tell each country that they do business in that they paid their taxes in other countries. C. The can exploit workers by paying them below-market wages in depreciating currencies. D. All of the above 6. Prior to Honda's decision to build a plant in Ohio. A. The Japanese government had been urging the automobile companies to begin production in the United States. B. The Japanese government had been urging the automobile companies to keep production in Japan. C. The Japanese government imposed import quotas on U.S.-made automobiles. D. None of the above 7. FDI can take the form of: A. Greenfield investment B. Cross-border M&A C. Establishing new production facilities in a foreign country D. All of the above 8. The Ford Motor Company recently acquired Mazda, a Japanese auto maker, and Jaguar, a British auto maker. A. This is an example of cross-border M&A B. This was a Greenfield investment C. Both a) and b) D. None of the above 9. Firms become multinational A. When they undertake foreign direct investments (FDI). B. With the establishment of new production facilities in foreign countries such as Honda's Ohio plant....
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