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Companies Have Developed Various Strategies for Lessening the Effects of Blockages

Question 10

Multiple Choice

Companies have developed various strategies for lessening the effects of blockages. Suggested activities for this purpose include all except which of the following statements?


A) Blocked funds can be used to purchase some local commodity which is then exported. With the concurrence of the host government, the money generated from selling the products abroad is placed in the central depository for use by the MNE.
B) Blocked funds can be used to purchase from local providers services needed by other affiliates such as information processing, call centers, product testing and research, and similar things.
C) Fronting loans can be used through which purchasing power can be transferred from the subsidiary to the parent when the subsidiary deposits money in the local branch of an international bank that, in turn, serves as collateral for a loan by another branch of the bank to the parent.
D) The MNE can develop holiday packages for tourists to the host country and use the blocked funds to pay for local services while retaining the customer payments in accounts outside the country where the funds are blocked.
E) None of the statements above; all are strategies for lessening the effects of blocked funds.

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