This is an interesting 'multinational corporations internalize MNC' quiz that is designed to test your knowledge about the same. Do you have good knowledge about Multinational Corporations Internalization? It refers to a type of transaction that is conducted within an MNC corporation rather than in the open market. So, if you think you have enough knowledge about the internalization process at MNC's, then you'll be able to score really well on this quiz. Just take the quiz and see how good you can score. Ready? All the best!
Makes a foreign direct investment
Takes out a foreign loan
Imports a foreign product
Exports a foreign product
Hires foreign workers
Both developed and developing countries
At least two countries
One country but relies on multiple markets for the consumption of goods it produces
At least two developed countries and one developing country
One country, but relies on purchasing intermediate foods from companies in other countries
True
False
A large reserve of natural resources, a large local market and efficiency opportunities
A small reserve of natural resources, a large local market and efficiency opportunities
A small reserve of natural resources, a small local market and efficiency opportunities
A large reserve of natural resources, a small local market and efficiency opportunities
A small reserve of natural resources, a large local market but few efficiency opportunities
Firm creates singular country production facilities, each of which produces different good or goods
Firm creates multiple production facilities, each of which produces the same good or goods.
Firm creates multiple production facilities, each of which produces different good or goods
Firm creates singular country facilities, each of which produces the same good or goods
Firm creates multiple production facilities, in multiple countries but with different technologies
Natural resources and local markets
Patented processes and natural resources
Employee know-how and natural resources
Local markets and natural resources
Patented processes and employee know-how
They are usually required by the host country governments
They are usually required by their home country governments
They can usually earn substantially higher incomes by internalizing intangible and specific assets
They will not be held accountable for raising the general welfare of their host countries
This helps them stay clear of intrusive host government regulations
True
False
True
False
It compromised the hard won national autonomy over their economies after achieving independence
Governments would be unable to use these resources to promote ISI strategies.
Extractive industries did not usually transfer technology
Extractive industries used primarily underpaid domestic workers even though their skills were developed
Extractive industries accelerated the depletion of non-renewable resources
Banking and transportation
Banking and public utilities
Transportation and extractive industries
Banking and extractive industries
Extractive industries
Import components free of taxes, as long as all of their output is exported
Pay workers less than elsewhere in the country
Pay workers more than elsewhere in the country
Ignore safety and environmental regulations
Imported components for assembly free of taxes, as long as none of their output is exported
Royalty-owned funds that purchase private assets in foreign markets
Royalty-owned funds that purchase public assets in foreign markets
Government-owned funds that purchase public assets in domestic markets
Government owned funds that purchase private assets in domestic markets
Government-owned funds that purchase private assets in foreign markets
The home of country to intervene to protect its citizens' claims
The home country to negotiate fair compensation with the host country
The nationalized company to full compensation from the host country
The host country to determine the value of full compensation
The host country to determine fair compensation
Decrease the profits of a particular investment.
Increase the costs of that investment
Increase the risk of that investment
Provide subsidized loans for that investment.
Depreciate their investments at slower rates.
Governments have never tried to create multilateral rules
The OCED and WTO rules have already created effective comprehensive guidelines.
Conflict between capital-exporting advanced industrial countries and the capital-importing developing countries has prevented agreement of such rules
Conflict between WTO and the group of 77 has prevented agreement on such rules
MNCs have already created rules on their own initiative
Foreign investments are private property and should be treated less favorably than domestic private property.
Governments must compensate the owner for the fair value of the expropriated property.
Governments have the right to expropriate but only for public purposes
Foreign investors cannot appeal to their home governments when they have disputes with the host government
Expropriation, like foreign loan defaults, must be punished with no new investment in the defaulting country for seven years
National treatment and most favored nation
Domestic favoritism and most favored nation
National treatment and least favored nation
Fair compensation and remittance rights
National treatment and fair compensation
Prevailing market conditions
Government guarantees to maintain currency exchange rates
Government fixing the price of gold
Government basing the exchange rate on world productivity
Government laws making currency speculation illegal
Governments must commit themselves to maintaining a specific fixed price against other currencies
Governments must allow their currencies to float freely with no government intervention
Governments can intervene in the foreign exchange market to influence the value of their currencies
Currency speculation is prohibited
The market alone determines the value of currencies.
The trade account
The service account
The income account
The foreign direct investment account
Unilateral transfers account
The trade account
The service account
The income account
The expense account
Unilateral transfers account
True
False
True
False
Increase the value of the dollar against the European Monetary System currencies
Reduce the value of the dollar against the Japanese yen and the German mark by 10-12 percent
Reduce the value of the dollar against gold
Reduce the value of the dollar against Special Drawing Rights
Increase the value of the dollar against the British pound and French Franc
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