In the Context of the Strategies for Reaching Global Markets

question 57

Multiple Choice

In the context of the strategies for reaching global markets, which of the following statements is true of direct investment?

• A) The cost involved in direct investment is high.
• B) It is the most basic level of international market development.
• C) It represents an especially strong opportunity for small firms.
• D) Foreign franchising is a type of direct investment.

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Definitions:

Trade Secrets

Trade secrets are confidential pieces of information that provide a business with a competitive edge, such as formulas, practices, designs, instruments, or patterns that are not generally known or reasonably ascertainable.

Catgut

A type of cord previously made from the natural fibers in the intestines of sheep or other animals, commonly used in making strings for musical instruments or surgical sutures.

Derived Demand

The demand for a factor of production or intermediate good that results from the demand for another intermediate or final good.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.