Which of the Following Statements Is True

question 7

Multiple Choice

Which of the following statements is true?

• A) Multinational firms tend to reduce the flow of technology between countries.
• B) Most foreign direct investment is found in labor-intensive industries.
• C) Multinationals do not always help to reduce the trade deficit of the host country.
• D) Foreign firms contribute to a significant increase in the host country's unemployment rate.
• E) Foreign direct investment reduces the stock of capital of the domestic country.

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Definitions:

Hypothetical Nations

Imaginary or theoretical countries often used as case studies or models in economic theories or simulations to explore various economic scenarios.

Equilibrium World Price

The price at which the quantity of a good or service demanded globally equals the quantity supplied across countries, without trade barriers.

Domestic Quantity Supplied

The total amount of a good or service that producers are willing and able to offer for sale within a domestic market at a given price.

Domestic Quantity Demanded

The total amount of a good or service that consumers in a given country want to buy at various prices during a specified period.