A Firm May Set Up Production Activities in a Foreign

question 95

True/False

A firm may set up production activities in a foreign country,where trade barriers do not currently exist,to reduce the threat of trade barriers being imposed later.

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Definitions:

Wage Rate

The fixed amount of compensation or payment received by an employee from an employer in exchange for work or services performed.

Labor

Refers to human effort, whether physical or mental, used in the production of goods and services.

Derived Demand

The demand for a good or service that results from the demand for a different, or intermediate, good or service.

Resources

Assets, materials, and human capabilities used to produce goods and services in an economy.