Question

1) Which of the following is NOT a reason governments interfere with comparative advantage?

A) Governments attempt to achieve full employment.

B) Governments promote economic development.

C) national self-sufficiency in defense-related industries

D) All are reasons governments interfere with comparative advantage.

2) Of the following, which would NOT be considered a way that government interferes with comparative advantage?

A) tariffs

B) managerial skills

C) quotas

D) other non-tariff restrictions

3) Which of the following is NOT always understood by MNE management?

A) culture, history, and institutions

B) political risk

C) foreign exchange risk

D) financial instruments

4) The twin agency problems limiting financial globalization are caused by these two groups acting in their own self-interests rather than the interests of the firm.

A) rulers of sovereign states and unsavory customs officials

B) corporate insiders and attorneys

C) corporate insiders and rulers of sovereign states

D) attorneys and unsavory customs officials

Answer 1

1.
Option D All are reasons governments interfere with comparative advantage.

Government interfere with comparative advantage to achieve employment, economic development, self-sufficiency in some industries

2.
Option B managerial skills

Government cannot do anything about managerial skills

3.
culture, history, and institutions

MNE management have difficulty in understanding culture, history and institutions

4.
corporate insiders and rulers of sovereign states

The twin agency problems limiting financial globalization are caused by corporate insiders and rulers of sovereign states acting in their own self-interests rather than the interests of the firm