Question 1

If a country has a high unemployment rate due to weak economic conditions and the income levels are considerably low, this country would most likely be an attractive target for direct foreign investment by MNCs as a result of the motive to _______________.

a) international diversification.

b) react to trade restrictions.

c) enter markets where superior profits are possible

d) use foreign technology of production.

Question 2

The most important variable in determining a country's degree of overall country risk:

a) is political risk.

b) is financial risk.

c) is the probability of a host government takeover.

d) may often vary with the country of concern.

Question 3

Other things being equal, a blocked funds restriction is more likely to have a significant adverse effect on a project if the currency of that country is expected to ____ over time, and if the interest rate in that country is relatively ____.

a) appreciate; low

b) appreciate; high

c) depreciate; high

d) depreciate; low