When Engaging in FDI, SMIE's Are More Likely to Invest

question 51

Multiple Choice

When engaging in FDI, SMIE's are more likely to invest in developed markets due to

• A) economic stability of developed market.
• B) economic instability of developed market.
• C) host country red tape.
• D) piggybacking.

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Definitions:

Comparative Advantage

The ability of a country to produce a specific good or service at a lower opportunity cost than a rival.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Rival Nation

A country that competes with another, often in economic, military, or technological aspects.

Mercantilism

An economic theory and practice that promotes government regulation of the nation's economy to increase state power at the expense of rival national powers.