If a Canadian Corporation Decides to Create FDI in Mexico

question 10

Multiple Choice

If a Canadian corporation decides to create FDI in Mexico because the new plant site has lower costs,this can cause Canada to:

• A) lose out on taxes because Mexico will receive them for the new site.
• B) deteriorate its trade position.
• C) have an increase in its unemployment rate.
• D) have a decrease in its unemployment rate.
• E) experience increased corporate profits.

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Definitions:

Mean of Production

Likely a typographic error intended to refer to "Means of Production," which are the resources (such as land, labor, and capital) used to produce goods and services.

Central Planning

An economic system where the government or a central authority makes all decisions regarding the production and distribution of goods and services.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Limited

In a business context, referring to a company where the liability of its members is restricted to what they have invested or guaranteed to the company.