A True Statement About Horizontal Investments Is That

question 51

Multiple Choice

A true statement about horizontal investments is that:

• A) they run the risk of being taken over by the government because they are export-oriented, and governments like a business that helps them generate foreign capital.
• B) they are unlikely to be takeover targets because these investments typically are made with an eye toward satisfying the host country's market demands.
• C) they are rated as high risk because foreign governments see them as providing fewer benefits to the country and greater benefits to a multinational company than other investments.
• D) they are high-risk investments in which goods or services produced are dissimilar to those produced at home.

---

Definitions:

Negative Externalities

Costs not incurred by consumers or producers but by a third party or the environment, as a result of an economic activity.

Opt Out

The act of choosing not to participate in an activity, service, or agreement, often referring to the decision by an individual or organization to not conform to a standard, policy, or regulation.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive, due to higher market prices.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that sellers are willing to supply.