Review Questions International Business

Review Questions

1. Explain the differences between horizontal and vertical FDI.

1. Can you summarize each of the OLI advantages?

1. How can FDI be used to overcome high transaction costs and prevent market failure?

1. Compare and contrast the three political views of FDI.

1. What are the costs and benefits of inbound FDI to host countries and of outbound FDI to home countries?

1. What is the primary difference between FDI and FPI?

7        What are the five major factors that influence foreign exchange rates?

8 What are the differences between a floating exchange rate policy and a fixed exchange rate policy?

9 Describe the IMF’s roles, responsibilities, and challenges.

10 Describe the three primary types of foreign exchange transactions made by financial companies.

11 Why is the strength of the US dollar important to the rest of the world?

12 How would you describe the theory of purchasing power parity (PPP)?

13 What is the relationship between a country’s current account balance and its currency?

14    Name and describe three ways nonfinancial companies can cope with currency risks.

Must be gramatically correct