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9. MacBean found that the export instability faced by developing nations was: *A. not very large and did not seriously interface with development B. very large and seriously interfered with development C. very large but did not seriously interfere with development D. not very large but seriously interfered with development
10. Supporting the price of a commodity by buying it when its price is low is: *A. a buffer stock B. a purchase contract C. an export control D. a marketing board
11. The policy of import substitution was most vigorously followed by: A. large developing nations during the 1970’s *B. large developing nations during the 1960’s C. small developing nations during the 1970’s D. small developing nations during the 1960’s
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12. What is the advantage of a policy of import substitution?
A. setting up an industry to replace imports minimizes risk of failure because the market for the product already exists in the nation as evidenced by the nation’s imports of the commodity
B. It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower their trade barriers against their manufactured exports
C. foreign firms are induced to establish tariff factories to overcome the tariff wall of developing nations *D. all of the above
13. Which are is not an advantage of export-oriented industrialization? A. It overcomes the smallness of the domestic market and allows developing nations to take advantages of economies of scale
*B. domestic industries grow accustomed to protection and have an incentive to become more efficient
C. production of manufactured goods for export requires and stimulates efficiency throughout the economy
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D. the expansion of manufactured exports is not limited by the size of the domestic market
14. Those nations that liberalized trade during the past decade *A. grew faster than that did not
B. grew more slowly than those that did not C. grew at about the same rate as those that did not D. any of the above
15. Which of the following is not part of the demand for a NIEO? A. the establishment of international commodity agreements
*B. preferential access for the manufactured exports of developed nations C. removal of the agricultural trade barriers in developed nations D. increasing the yearly flow of foreign aid to developing nations
Chapter 12: International Resource Movementsand Multinational Corporations Multiple-choice Question:
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1. Portfolio investments refer primarily to: A. direct investments *B. bonds C. liquid assets D. short-term assets
2. Direct investments usually involve the transfer of: A. capital B. technology C. management *D. all of the above
3. Which of the following is not true with regard to direct investments? A. U.S. direct investments abroad and foreign direct investment in the U.S. grew very rapidly from 1950 to 2001
B. The amount of U.S. direct investments abroad is similar to the amount of foreign direct investments in U.S.
*C. U.S. direct investments in Canada are higher than in Europe
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