Question 1

In recent years, Canada has virtually closed its borders to foreign workers who desire to migrate to the country.

Accepted Answer

The given information does not provide any relevant detail about Canada's policies on foreign workers, so it cannot be determined whether or not Canada has closed its borders to foreign workers.

Question 2

Multinational corporations sometimes locate manufacturing subsidiaries abroad to avoid tariff barriers, which would place their products at a competitive disadvantage in a foreign country.

Accepted Answer

This statement is true. By locating subsidiaries abroad, multinational corporations can avoid tariff barriers and remain competitive in foreign markets.

Question 3

In recent years, Apple Inc.has triggered controversy through its legal avoidance of U.S.income taxes.

Accepted Answer

This question is unrelated to the information provided in Figure 9.3, but the answer is true.

Question 4

Recent evidence suggests that wages paid by U.S.multinational enterprises to poor country workers are much lower than local manufacturing wages.

Accepted Answer

Recent evidence suggests that wages paid by U.S. multinational enterprises to poor country workers are typically higher than local manufacturing wages. This is because multinational enterprises often have higher productivity and can afford to pay more than local firms.

Question 5

About two thirds of Canada's permanent visas are granted for Canada's economic needs, such as the filling of labor shortages.In contrast, about two thirds of U.S.green cards are granted for family reasons.

Accepted Answer

The statement correctly reflects the difference in the allocation of permanent visas between Canada and the United States.

Question 6

Most multinational corporations have a low ratio of foreign sales to total sales, usually 5 percent or less.

Accepted Answer

There is no connection between the figure and the statement. The statement is false as many multinational corporations have foreign sales that represent a much larger percentage of their total sales.

Question 7

Sinopec Group would undertake forward vertical integration if it acquired oil wells in the Middle East.

Accepted Answer

The answer of Sinopec Group would undertake forward vertical integration...

Question 8

Forward vertical integration would occur if a U.S.automobile manufacturer acquired a German subsidiary.

Accepted Answer

The question does not relate to the information presented in Figure 9.3 or the Mexican labor market. It is a separate question about vertical integration and the nationality of the subsidiary being acquired. The correct answer is false, as vertical integration would only occur if the subsidiary involved in the acquisition was involved in the same industry or supply chain as the acquiring company. Nationality alone does not determine whether an acquisition would constitute vertical integration.

Question 9

Concerning the decision of a U.S.resident to lend or invest abroad, Zimbabwe and Sudan have recently been considered to be relatively safe investments regarding the risk of default.

Accepted Answer

The statement in the question is not related to the information or data provided in Figure 9.3. Additionally, Zimbabwe and Sudan are not commonly considered safe investment options due to political instability and economic challenges. Therefore, the statement in the question is false.

Question 10

Under U.S.tax law, a parent American company can defer U.S.taxes paid on the income of its foreign subsidiary as long as that income is retained overseas rather than repatriated to the United States.

Accepted Answer

This is known as the "deferral of foreign income" rule and is a provision in the U.S. tax code. It allows U.S. companies to avoid paying taxes on the overseas income of their foreign subsidiaries until that income is repatriated, or brought back, to the United States. As long as the income remains overseas, the parent company can defer paying U.S. taxes on it.

Question 11

Most Japanese auto assembly plants located in the United States are located in southern states such as Texas, Alabama, and Tennessee.

Accepted Answer

The given statement is true, according to the information provided in the question there is no contradicting information.

Question 12

Vertical integration occurs if a parent multinational corporation establishes foreign subsidiaries to produce intermediate goods or inputs that go into the production of a finished good.

Accepted Answer

The given statement is true as vertical integration is a common strategy adopted by multinational corporations to ensure a steady supply of inputs at a low cost while securing a market for their finished products.

Question 13

According to U.S.tax law, a multinational enterprise headquartered in the United States is allowed credits against its U.S.income tax liabilities in an amount equal to the income taxes it pays to foreign governments.

Accepted Answer

This statement is true. The U.S. tax law allows for foreign tax credits to be applied against income tax liabilities in order to avoid double taxation on income earned abroad by multinational enterprises headquartered in the United States.

Question 14

General Electric and Boeing are examples of American companies that have greatly benefitted from the transfer of technology from China to the United States.

Accepted Answer

The statement in the question is not related to the information presented in Figure 9.3, which represents the Mexican labor market. Therefore, the answer is False.

Question 15

Horizontal integration would occur if General Motors sets up a subsidiary in Mexico to produce automobiles identical to those that it produces in the United States.

Accepted Answer

Horizontal integration occurs when a company expands horizontally by setting up a subsidiary or acquiring another company in the same industry and producing identical or similar products. In this case, General Motors would set up a subsidiary in Mexico to produce automobiles identical to those it produces in the United States, which is an example of horizontal integration.

Question 16

Foreign direct investment would occur if Mobile Inc.of the United States acquired sufficient common stock in a foreign oil company to assume voting control.

Accepted Answer

Foreign direct investment (FDI) occurs when a company invests directly in facilities to produce or market a product in a foreign country. Acquiring sufficient common stock to assume voting control of a foreign company qualifies as FDI because it represents a long-term interest and significant influence over the management of the foreign entity.

Question 17

Most vertical foreign investment, as implemented by multinational corporations, is "forward" in nature rather than "backward."

Accepted Answer

Most vertical foreign investment by multinational corporations is "backward" in nature, meaning it is primarily focused on accessing raw materials or inputs for their production processes, rather than "forward" investments which would involve investing in distribution or sales operations in foreign markets.

Question 18

International trade in goods and services and flows of productive factors are substitutes for each other.

Accepted Answer

The answer of International trade in goods and services and...

Question 19

Foreign direct investment would occur if Microsoft Inc.of the United States purchased securities of the French government.

Accepted Answer

Foreign direct investment refers to investments made by a foreign company or individual in a company or entity located in another country, with the purpose of establishing a lasting interest and control in the invested entity. Purchasing securities of a government does not meet this criteria and is not considered foreign direct investment.

Question 20

Royal Dutch Shell, Walmart Stores, and Sinopec Group are among the world's smallest corporations in recent years.

Accepted Answer

The statement in the question is not related to the information provided in Figure 9.3.

Quiz 9: International Factor Movements and Multinational Enterprises