Poor Countries Often Have a Difficult Time Attracting Foreign Direct

question 8

Multiple Choice

Poor countries often have a difficult time attracting foreign direct investment funds because

• A) wages are low in poor countries.
• B) investment risks are quite low in poor countries so rates of return are low.
• C) property rights are not protected so investors fear their property may be confiscated.
• D) All of the above are correct.

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Definitions:

Standardized Goods

Products that are uniform in quality and specifications, allowing them to be interchangeable with others of the same type.

Market Share

The share of a market held by a certain company or product.

Economic Losses

The difference between revenues earned from sales and the total costs of production, including opportunity costs, when the latter exceeds the former.

Market Supply

The total amount of a specific good or service that is available to consumers, determined by the sum of all individual suppliers' products in the market.