Which of the Following Best Describes the Direct Investment Global

question 3

Multiple Choice

Which of the following best describes the direct investment global entry strategy?

• A) With direct investment, a firm maintains total ownership of its plants, operation facilities, and offices in a foreign country.
• B) Direct investment occurs when a firm enters a new market by pooling its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.
• C) Direct investment refers to depositing payroll funds in a foreign bank.
• D) Direct investment designates the maximum quantity of a product that may be brought into a country during a specified time period.
• E) Direct investment occurs when a producer sells its offering in a foreign market at a price less than its production cost.

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Definitions:

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service more efficiently than its competitors when using the same amount of resources.

Opportunity Cost

The benefit that is missed or given up when choosing one alternative over another.

Comparative Advantage

Comparative advantage occurs when a country can produce a good at a lower opportunity cost than another country.

Absolute Quantities

A term used to describe the total amount of a product, asset, or resource, measured independently and without comparison to other entities.