Most Companies Become Involved in Direct Exporting When

question 72

Multiple Choice

Most companies become involved in direct exporting when

• A) foreign governments believe that they will benefit the most from allowing the entry of direct exports.
• B) emerging markets in foreign countries become economically viable.
• C) they believe their volume of sales will be sufficiently large and easy to obtain, thus making intermediaries unnecessary.
• D) the domestic market becomes saturated with competing products and services.
• E) evolving technologies in foreign countries come online.

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Definitions:

Leakages-Injections Approach

An economic understanding and analysis of how savings, taxes, and imports (leakages) offset government spending, investments, and exports (injections) in the circular flow of income.

Value Added

The increase in worth of a product or service as a result of a particular process, often characterized by the difference between the price of the finished product and the cost of the inputs involved in making it.

Raw Materials

Basic materials extracted from natural resources or produced through agriculture, which are used in the production of goods and services.

Injection

Any spending other than by households or any income other than from resource earnings; includes investment, government purchases, exports, and transfer payments.