E452exs3S11

E452exs3S11 - Name FINAL EXAM Economics 452 International...

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Unformatted text preview: Name FINAL EXAM Economics 452 International Trade Theory and Policy Spring 2011 FOREIGN DIRECT INVESTMENT 1-4 Starbucks acquired a U.K. firm to operate as its subsidiary there. 1. Starbucks must have an internalization advantage that ensures a) that the subsidiarys profit motives match its own b) production should take place in the United Kingdom c) theres something that makes Starbucks better than other firms d) Starbucks would earn more in the United States than in the United Kingdom e) all of the above 2. The United Kingdom must have a location advantage that ensures a) that the subsidiarys profit motives should match its own b) production should take place in the United Kingdom c) theres something that makes Starbucks better than other firms d) Starbucks would earn more in the United States than in the United Kingdom e) all of the above 3. Which of the following is an example of a location advantage? a) Starbucks coffee tastes better than UK firms b) coffee shops need to be located close to customers c) a licensee might produce bad coffee to save on costs d) Starbucks buys most of its coffee from Columbia e) none of the above 4. Which of the following is an example of an internalization advantage? a) Starbucks coffee tastes better than UK firms b) coffee shops need to be located close to customers c) a licensee might produce bad coffee to save on costs d) Starbucks buys most of its coffee from Columbia e) none of the above 1 INTERPTEMPORAL TRADE 5-8 Suppose the United States currently borrows from the ROW. 5. Which of the following is NOT true? a) The ROW currently consumes less than it produces in value. b) The United States currently consumes more than it produces in value. c) The ROW will be able to consume more than produces in value sometime in the future. d) The United States must produce more than consumes in value sometime in the future. e) No country can import more than export in the current period 6. In an intertemporal budget constraint, 1 + r represents the C F a) relative price of current to future, P / P F C b) relative price of future to current, P / P C c) price of current consumption and production, P F d) price of future consumption and production, P e) autarky level of consumption and production 7. This pattern of intertemporal trade could stem from the United States, at the same interest rate: a) consuming more current to future than the ROW b) consuming less current to future than the ROW c) producing more current to future than the ROW d) producing less current to future than the ROW e) a) and d) 8. If the real interest rate increases while under intertemporal trade, who gains and loses?...
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This note was uploaded on 02/13/2012 for the course ECON 452 taught by Professor Vacaflores during the Spring '06 term at Texas A&M.

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E452exs3S11 - Name FINAL EXAM Economics 452 International...

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