Foreign Direct Investment Typically Occurs When

question 35

Multiple Choice

Foreign direct investment typically occurs when

• A) The earnings of the parent company are invested in plant expansion overseas
• B) The parent company transfers jobs overseas
• C) The parent company closes its foreign production plants
• D) The parent company purchases bonds of foreign governments

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Definitions:

Pure Monopolist

A single producer in a market who controls all supply of a product with no close substitutes, allowing them to exert significant power over prices and quantities sold.

Profit-Maximizing

A business strategy focused on finding the optimal level of output at which total revenues exceed total costs by the greatest amount.

Marginal Cost

The change in total cost that arises from producing one additional unit of a product or service.

Marginal Revenue

The increase in income resulting from the sale of one extra product or service unit.