2. If a British company sets up a subsidiary in France that produces products for the French
market, this investment is most likely to result in what type of economic effect in the short run?
a. capital export from France
b. import displacement in France
c. export stimulus for France
d. capital inflow for Britain
8. Which of the following is the most persuasive reason for companies to act more ethically and
a. The U.S. government provides tax breaks to companies that donate to international
b. Companies face no outside pressures to act responsibly.
c. Unethical or irresponsible behavior can negatively impact employee morale.
d. Companies that have good ethical behavior are proven to have higher earnings than
10. Which of the following is a problem that Anglo American PLC is facing as it tries to adopt an
aggressive strategy against HIV/AIDS?
a. Many employees are not following through on their treatments.
b. Its programs have been much more effective than imagined and costs to treat
employees have dropped.
c. HIV/AIDS prevention programs are more effective than treatment programs.
d. They have been incurring huge costs to help migrant workers who generally do not have
HIV/AIDS and do not take the disease back to their home villages.
11. Which of the following undesirable results may come about for a country running a favorable
balance of trade?
a. It may have to devalue its currency.
b. Its credit to other countries may buy insufficient goods and services when repaid.
c. Its unemployment increases.
d. It cannot as easily repay its external debt
20. All of the following are potential problems of using export controls EXCEPT which one?
a. There is more incentive for smuggling.
b. Import prices may go down for the country imposing the controls.
c. There will be an incentive for other countries to develop production of their own.
d. Domestic producers may have less incentive to increase output