Why Did Global Firms Not Reject China's Demand for Investing

question 15

Multiple Choice

Why did global firms not reject China's demand for investing in Chinese companies, so that China could move up the value chain?

• A) Because they wanted to gain access to China's sizeable market
• B) In order to take advantage of China's cheap labor force
• C) So that China would buy billions of dollars' worth of U.S. government bonds that fund the U.S. budget deficit
• D) Both options A and B are true.

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Definitions:

Batch Costs

Expenses associated with processing a batch of products, including labor, materials, and overhead, used to calculate per unit costs.

Faculty Level Costs

The expenses associated with employing teaching and academic staff at educational institutions.

Level of Fixed Costs

The total amount of costs that do not vary with production volume, such as rent, salaries, and insurance.

Level of Risk

A measure of the uncertainty associated with an investment or decision, often evaluated in terms of the variability of returns or potential for loss.