An mnc can a be a factor that increases the

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53) An MNC can A) be a factor that increases the opportunities of the citizens of less developed countries. B) be a factor that increases the opportunity set of domestic investors. C) increase economic efficiency. D) all of the options Answer: D Topic: Multinational Corporations Accessibility: Keyboard Navigation 54) Today for an MNC to produce merchandise in one country on capital equipment financed by funds raised in a number of different currencies through issuing securities to investors in many countries, and then selling the finished product to customers in yet other countries is A) not uncommon. B) extremely common. C) uncommon. D) the norm. Answer: A Topic: Multinational Corporations Accessibility: Keyboard Navigation
55) A corporation that can source its products in one country, sell them in another country, and raise the funds in a third country A) is a multinational corporation. B) is a domestic firm if all of the shareholders are from the same country. C) enjoys a built-in hedge against exchange rate risk. D) enjoys a built-in hedge against political risk. Answer: A Topic: Multinational Corporations Accessibility: Keyboard Navigation 56) Country A can produce 10 yards of textiles or 6 pounds of food per unit of input. Compute the opportunity cost of producing one additional unit of food instead of textiles. A) 1.67 pounds of food per yard of textiles B) 1.67 yards of textiles per pound of food C) 0.6 pounds of food per yard of textiles D) 0.6 yards of textiles per pound of food Answer: B Explanation: 10 yards of textiles / 6 pounds of food = 1.67 yards of textiles per pound of food Topic: Appendix: The Theory of Comparative Advantage Accessibility: Keyboard Navigation 57) The gains from trade A) are likely realized in the long run when workers and firms have had the time to adjust to the new competitive environment. B) are immediately realized in the short run, when governments drop protectionist policies. C) are smaller than the costs of adjustment. D) none of the options Answer: A Topic: Appendix: The Theory of Comparative Advantage Accessibility: Keyboard Navigation 58) Restrictions or impediments to free trade include such things as A) import quotas. B) import tariffs. C) costly transportation. D) all of the options Answer: D Topic: Appendix: The Theory of Comparative Advantage Accessibility: Keyboard Navigation

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