SOLVED

271. Firms such as McDonald’s, Pizza Hut, and KFC, have entered the global market by offering investors the opportunity to buy: A. licensed trade offices. B. independent exporting houses. C. multinational subsidiaries. D. franchises. 272. Using contract manufacturing as a strategy to reach global markets offers firms the advantage of: A. expert and experienced laborers. B. reduced financial risks. C. increased volatility. D. currency stability. 273. Companies may have several reasons for creating joint ventures. Which of the following statements is one reason why firms may decide to form a joint venture? A. They may wish to contract manufacture with each other. B. They will save time to market if they pool their technological know-how. C. These arrangements are always less risky than strategic alliances. D. These arrangements avoid the temptation to tap into marketing and management expertise of the parent companies. 274. For a firm to be considered a multinational corporation, which of the following conditions must be true? A. It must have manufacturing facilities and a physical presence in several countries. B. Its marketing arm must be based at the company’s world corporate headquarters. C. Stock ownership must be domestic. D. All transactions must be financed by the International Monetary Fund. 275. A fast-growing form of foreign direct investment is sovereign wealth funds (SWFs). Why do these investments by governments with surplus cash flows worry trade experts? A. SWFs invest in high risk start-ups with no proven history of producing goods and services that developing or developed countries need. They may likely undermine the years of development of growing economies. B. SWFs have a greater risk of going bankrupt than other investments because governments are not good at running businesses. C. Some fear that governments investing their SWFs in large firms may gain control of natural resources, sensitive technologies, and the decision making of management. D. Some trading experts believe that SWFs are supported by terrorist organizations, and their strategy is an indirect way to undermine the creation of U.S. jobs. Â Â