Which of the Following Is NOT an Advantage to Exporting

question 34

Multiple Choice

Which of the following is NOT an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

• A) fewer political risks
• B) greater agency costs
• C) lower front-end investment
• D) All of the above are advantages.

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Definitions:

Diplomatic Expertise

The skill and knowledge required to manage international relations and negotiate effectively on behalf of a state.

Differences in Tastes

Variations in consumer preferences that influence demand for products and services across different markets or demographics.

Resource Endowments

The natural resources, labor force, capital, and technology that a country possesses, which influence its economic potential.

Trade Gains

The benefits that countries receive from engaging in international trade, often leading to more efficient production and a greater variety of goods and services.