When One Firm Enters a Foreign Country Through FDI, Its

question 5

Multiple Choice

When one firm enters a foreign country through FDI, its rivals are likely to follow by undertaking additional FDI in a host country to:

• A) Create knowledge spillover
• B) Discover a new market for its goods
• C) Overcome and combat market failure through FDI
• D) Acquire location advantages or neutralize the first mover s location advantages

Comprehend the effects of currency appreciation and depreciation on purchasing power and trade balances.

Grasp the concept of Eurocurrency and its characteristics, including deposit locations and market duration.

Identify the challenges and strategies related to political risk and expropriation in international finance.

Recognize the influence of exchange rates on multinational firms' financial decisions, including inventory policies and cash flow evaluations.

---

Definitions:

Self-Concept

An individual's perception of themselves, including beliefs about one's abilities, appearance, and personality.

Emotional Tie

A deep emotional connection or bond between individuals, which can influence behavior and feelings.

Diffuse Distress

A widespread feeling of unease or discomfort that is not localized to one specific source or cause.

Conditioned Reinforcers

Stimuli or rewards that gain their reinforcing power through their association with primary reinforcers.