Which of the Following Is an Advantage of Exporting

question 50

Multiple Choice

Which of the following is an advantage of exporting?

• A)High control and low transportation costs
• B)Zero risk of exchange rate fluctuation
• C)Fast entry and low risk
• D)Established manufacturing operations in the foreign country
• E)High local knowledge

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Definitions:

Principal

The original sum of money borrowed in a loan, or the initial amount of investment, excluding any interest or profits.

Agent

In economics, an agent is an individual or entity that makes decisions, often in the context of trading or negotiating, on behalf of another person or group.

Informational Asymmetry

A situation where one party in a transaction has more or superior information compared to another. This often leads to an imbalance in power or decision-making.

Hidden Action

A situation in principal-agent relationships where the agent's actions are not fully observable by the principal, potentially leading to agency problems.