Which of the Following Statements Is NOT True Regarding MNEs

question 51

Multiple Choice

Which of the following statements is NOT true regarding MNEs when compared to purely domestic firms?

• A) MNEs tend to rely more on short and intermediate term debt.
• B) MNEs have greater foreign exchange risk.
• C) MNEs have greater costs of asymmetric information.
• D) MNEs have higher agency costs.

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Definitions:

Barter Situation

A trade system where goods or services are exchanged directly for other goods or services without the use of money as a medium of exchange.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type.

Standard of Value

A base for comparison that allows the determination of the economic value of goods and services.

Short Run

A period in economics during which some factors of production are fixed, limiting the immediate ability of businesses to expand or change production levels.