The "Liability of Foreignness" Is The

question 120

Multiple Choice

The "liability of foreignness" is the:

• A) inability of most U.S.managers to truly comprehend foreign cultures.
• B) political disadvantage that U.S.firms have when doing business abroad.
• C) risk of participating outside a firm's domestic markets in the global economy.
• D) preference for "buying local," which always puts foreign firms at a disadvantage when competing in the U.S.market.

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Definitions:

Industrially Advanced Nations

Countries that have highly developed industries and infrastructure, often characterized by high levels of income, technological innovation, and standard of living.

Managed Float

A currency exchange rate policy where the central bank allows the currency value to fluctuate in the foreign exchange market but intervenes to prevent excessive movements.

Fixed Rate System

A monetary system in which exchange rates are set and maintained at a certain level by a government or central bank.

Flexible Exchange Rates

A system in which the worth of a currency is permitted to vary based on the foreign exchange market, free from direct governmental interference.