Question

1. MNCs try to internationalize the related economic transactions through locational advantages using which of the following investments?
   1. Market-oriented investments
   2. Natural resources investments
   3. Efficiency-oriented investments
   4. All of the above

2. MNCs can potentially harm the countries that host them because
   1. the FDI technology transfers may further produce positive externalities.
   2. their tactics may crowd out domestic producers on domestic capital markets.
   3. the host countries may not generate more human capital once they start receiving enough physical capital resources.
   4. they could expand networks to external markets for domestic producers and increase their exposure to the global market.

3. The current account balance of the United States began to deteriorate in
   1. the early 1970s.
   2. the early 1980s.
   3. the late 1980s.
   4. the early 1990s.

4. People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot
   1. increase savings at the same time that a trade deficit grows.
   2. spend more than they earn.
   3. invest more than they save.
   4. have both current account and financial account deficits at the same time.

5. If there is a trade deficit, which of the following is true?
   1. The current account balance could be positive, negative, or zero.
   2. There will be a current account deficit.
   3. There will be a current account surplus.
   4. There will be a financial account surplus.

6. The controls in cross-border flows of capital are most often aimed at slowing or eliminating movements of
   1. reserve assets.
   2. foreign direct investment.
   3. foreign portfolio investment.
   4. non-reserve government assets.

Answer 1

Answer Option D) All of the above

Answer Option B ) the early 1980s

The current account balance of the United States began to deteriorate in the early 1980s

Answer Option D) have both current account and financial account deficits at the same time

People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries can have both current account and financial account deficits at the same time

Answer Option D) There will be a financial account surplus

If there is a trade deficit , then there will be a financial account surplus

Answer Option C)foreign portfolio investment

The controls in cross-border flows of capital are most often aimed at slowing or eliminating movements of foreign portfolio investment