When a Multinational Affiliate Replicates Production in a Foreign Country

question 31

Multiple Choice

When a multinational affiliate replicates production in a foreign country it is called ________ foreign direct investment.

• A) bisectional
• B) direct
• C) horizontal
• D) transitional
• E) vertical

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers where no single participant can significantly influence the price of goods or services.

Demand Curve

A graph showing the relationship between the price of a good and the amount of the good that consumers are willing to purchase at that price.

Deadweight Loss

The reduction in economic efficiency that happens when equilibrium is not reached or is unattainable for a specific good or service.

Import Tariff

A tax imposed by a government on goods and services imported into its country to protect domestic industries from foreign competition.