A USfirm Is Deciding on Whether or Not to Build a a Production

question 124

Multiple Choice

A U.S.firm is deciding on whether or not to build a production facility in Montenegro.All else equal, if Montenegro has a very low foreign debt as a percentage of GDP, it therefore has relatively low

• A) economic risk.
• B) political risk.
• C) investment risk.
• D) financial risk.

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Definitions:

Excise Tax

A tax imposed on specific goods, such as tobacco and alcohol, typically to discourage their consumption or generate revenue.

Tax Revenue

The revenue collected by governments from taxes.

Subsidy

A payment the government makes to either the buyer or the seller, usually on a per-unit basis, when a good or service is purchased or sold.

Selling Price

The amount of money for which a seller offers a product or service to a buyer.