That Which Does Not Apply to Direct Investment

question 101

Multiple Choice

That which does not apply to direct investment .

• A)relies on intermediaries to represent the company in a target country
• B)allows a foreign firm to take advantage of a domestic company's political savvy
• C)represents the greatest control for the firm
• D)creates a market position in the host country
• E)could cause the firm to suffer losses of their investment if economic conditions deteriorate

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Definitions:

Purely Competitive

Another term for pure competition, it refers to a theoretical market structure with a large number of buyers and sellers, homogeneous products, and free entry and exit from the market.

Output Level

The total amount of goods or services produced by a business or economy within a specific period.

Economic Loss

A situation where total cost exceeds total revenue, resulting in a negative profit for a business.

Average Variable Cost

The total variable costs divided by the quantity of output, indicating the variable cost per unit of output.