When Foreign Firms Build Production Facilities in the United States

question 50

Multiple Choice

When foreign firms build production facilities in the United States, they are engaging in

• A) exporting.
• B) foreign direct investment.
• C) importing.
• D) countertrading.

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Definitions:

Unit Elastic

A situation where the percentage change in quantity demanded is equal to the percentage change in price, resulting in a price elasticity of demand equal to -1.

Green Ink Pads

Special ink pads used primarily for stamping, often utilized in art, crafting, or in administrative tasks requiring distinct color coding.

Lerner Index

A measure of a firm's pricing power and market control, calculated as the difference between price and marginal cost, divided by price.

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in its price.