An economic system is the set of structures and processes

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Reference no: EM132177684

1. A government’s internal debt can be incurred for any EXCEPT which of the following reasons?

a. State-owned enterprises run large deficits.

b. The tax system is so poorly run that the government cannot collect all the revenues it expects.

c. The government borrows money from international financial institutions.

d. Government costs such as security and social programs exceed total tax revenues.

2. An economic system is the set of structures and processes that ____________ in a country.

a. directs the movement of specific products to specific consumers

b. stipulates the roles and responsibilities of consumers

c. guides the allocation of resources and shapes the conduct of business activities

d. sets the standards of competitive success for companies in the economy

3. Which of the following stakeholders groups want additional sales and increased productivity, which result in higher profits and larger returns going to them?

a. shareholders

b. society at large

c. government

d. customers

4. The net export effect of a foreign direct investment is positive in the host country if the FDI results in ____________.

a. more imports from the investing country

b. a reduction of imports by the home country

c. dividends not being sent back to the home office

d. the development of markets abroad for the FDI in the host country

5. Which of the following statements is true regarding the potential economic effects of MNEs?

a. Host country restrictions on capital outflow increase confidence in the economy and encourage MNEs to invest in the host country.

b. The effects of MNEs on growth and employment are not a zero-sum game, both countries may benefit.

c. FDI brings only capital inflows to the host country.

d. MNEs’ investments are initially favorable to the home country and unfavorable to the host country.

Reference no: EM132177684

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