In the Short­run (Specific­factors) Model, Foreign Direct

question 38

Multiple Choice

In the short­run (specific­factors) model, foreign direct
Investment is expected to cause a(n) ________ in the
Return to capital and a(n) ________ in the return to
Land in the receiving country.

• A)decrease; decrease
• B)increase; decrease
• C)decrease; increase
• D)increase; increase

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Definitions:

Cost of Goods Sold

The total cost of manufacturing or purchasing the goods that a company sold during a specific period.

Direct Labor Hours

The total hours of labor directly involved in producing goods or providing services, used in calculating labor costs and efficiency.

Period Costs

Expenses on the income statement not directly tied to the production of goods, such as administrative and selling expenses.

Conversion Costs

The sum of labor costs and overhead expenses associated with transforming raw materials into finished goods.