Current Event Article #4
When barriers to international trade are implanted they usually result in negative
consequences for many parties. However, in some situations one particular demographic
will suffer more then others based o
_ 12. In what way may TNCs have a competitive advantage over national firms?
a. TNCs always have to pay taxes in their native countries, which lowers their taxes
in the foreign countries where they operate.
14. Vertical foreign direct investment (FDI) refers to TNC facilities in different countries
a. cover the identical stage in the supply chain.
b. manufacture 100 percent of a product.
c. cover different sta
Extra Questions for the Case Study on Transfer Pricing
I. Multiple-Choice Questions
_ 1. If a country levies very high corporate income taxes compared to other countries
where a transnational corporation (TNC) operat
II. Multiple-Choice Questions
For each question, select the statement that best answers the question or completes the
_ 1. An industry whose cost of producing additional units of output declines a
_ 7. A multinational enterprise (TNC) is defined as a firm that:
a. exports more than it imports.
b. sells in many markets around the globe.
c. manages production or distribution facilities (real assets) in more
_ 7. Which of the following statements about foreign direct investment is/are
a. FDI in manufacturing accounts for almost all FDI.
b. The larger part of FDI is moving manufacturing plants to low-wage countrie
Problem Set #5
The concept of increasing returns to scale undermine the H-O model because it
assumes that countries are trading in imperfectly competitive markets in order to gain a
competitive advantage. The H-O model assumes
_ 20. In what way(s) may TNCs have a competitive advantage over national firms?
a. TNCs can manipulate transfer prices on goods and services traded among branches of the
firm in different countries.
b. TNCs can r