Foreign Direct Investment (FDI) CDS Questions

CDS Economy

Foreign Direct Investment (FDI) MCQ Questions


7.
In which mode of entry does the firm set up a new plant in a foreign country?
A.
Franchising
B.
Greenfield venture
C.
Portfolio investment
D.
Licensing
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ANSWER :
B. Greenfield venture
8.
One of the main benefits of international business to nations is:
A.
Increased unemployment
B.
Earning foreign exchange
C.
Trade deficits
D.
Dependence on imports
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ANSWER :
B. Earning foreign exchange
9.
What is the most preferred mode of entry for initial international business involvement?
A.
Joint venture
B.
Wholly owned subsidiary
C.
Exporting
D.
Licensing
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ANSWER :
C. Exporting
10.
Which of the following is not a limitation of exporting?
A.
Customs duties
B.
Transportation costs
C.
Close proximity to customers
D.
Import restrictions
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ANSWER :
C. Close proximity to customers
11.
What is the term for setting up a joint firm by two independent companies?
A.
Contract manufacturing
B.
Joint venture
C.
Portfolio investment
D.
Franchising
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ANSWER :
B. Joint venture
12.
What is a major advantage of contract manufacturing?
A.
High control over production
B.
Lower costs in developing countries
C.
No risks involved
D.
Eliminates the need for investment
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ANSWER :
B. Lower costs in developing countries