1. Which of the following below are about the benefits of FDI to the host country?

a. Import substitution.

b. Capital infow followed by outflow.

c. Resource transfer.

d. (a) and (b) only.

e. (b) and (c) only.

2.) The decision framework leading to license choice over FDI can be shown in following order :

a. Transportation costs are not high-> Import barriers are low.

b. Transportation costs are high-> licensing is not easy. 

c. Transportation costs are high -> licensing is easy.

d. Transportation costs are not high -> Import barriers are high.

e. None is correct.

3.) Which of the following is correct about determinants of FDI ?

a. One of the determinants is market size and it is proxied by GDP.

b. Infrastructure can be cited among one of the FDI determinants.

C. Greenfield type of FDI has its own specific determinants.

d. (a) and (b) are correct.

e. None of the above is correct.

4.) With a plant in France, for example, not only France but other European countries can be supplied from the French facility rather than from the U.S. plant.

a. The above statement describes the process of a the growth stage according to Vernon's product life cycle

theory and FDI can take place in this stage. b. The above statement describes the process of a the maturity stage according to Vernon's product life cycle theory and FDI can take place in this stage.

c. The above statement describes the process of a the internalization motive according to Dunning's OLI paradigm.

d. None is correct.

5.) Foreign investors seek natural resources, cheap labor is a case of :

a. Tariff or quota jumping FDI.

b. Efficiency seeking FDI.

c. Factor of Resource seeking FDI.

d. Greenfield Investment

e. None is correct.