A Firm Is More Likely to Engage in Horizontal Foreign

question 22

Multiple Choice

A firm is more likely to engage in horizontal foreign direct investment if

• A) trade costs are high and there are internal economies of scale.
• B) trade costs are low and there are internal economies of scale.
• C) trade costs are high and there are external economies of scale.
• D) trade costs are low and there are external economies of scale.
• E) trade costs are low and firms experience constant returns to scale in production.

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry, where it encompasses processes, designs, and tools.

Interest Groups

Organizations formed to influence public policy and decision-making in favor of specific interests or causes.

Methods

Systematic ways or approaches used to accomplish a task, conduct research, or solve a problem.

Information Campaigns

Efforts to inform or influence public opinion through the dissemination of specific information, often used in political or marketing contexts.