MNCs Usually Enjoy More Bargaining Power Than Host Countries in Low-Skilled

question 9

Multiple Choice

MNCs usually enjoy more bargaining power than host countries in low-skilled labor-intensive manufacturing industries because

• A) only a few developing countries have excess low skilled labor.
• B) investments in low-skilled manufacturing entail a relatively low amount of fixed capital.
• C) investments in low-skilled manufacturing cannot be readily moved out of a particular country.
• D) technology in many manufacturing industries changes rapidly and, therefore, is easily transferred to host workers.
• E) like natural-resource investments, manufacturing investments can become hostages.

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Definitions:

Basket of Goods

A fixed set of consumer products and services whose price is monitored over time to calculate inflation through the Consumer Price Index.

Inflation Rate

The rate at which prices for a wide range of goods and services go up, causing a decline in how much can be bought with the same amount of money.

Teddy Bears

Soft, plush toys in the form of bears, often given as a comfort object for children and as gifts of affection for holidays or special occasions.

Producer Price Index

An economic indicator that measures the average changes in prices received by domestic producers for their output, which is a signal of future consumer price movements.