Which of the Following Is False as Concerns Use of an Export

question 12

Multiple Choice

Which of the following is false as concerns use of an export strategy to compete in foreign markets?

• A) One advantage of an export strategy is the ability to test the international waters before having to commit substantial sums to establishing operations in foreign countries-the amount of capital required to begin exporting is frequently quite minimal.
• B) Exporting carries the risk of being vulnerable to adverse shifts in currency exchange rates.
• C) An export strategy is especially well suited to accommodating the different needs and preferences of buyers in different countries.
• D) An export strategy may allow a company to gain additional scale economies from centralizing production in one or several giant plants.
• E) An export strategy is disadvantageous when costs in the country where the goods are being manufactured for export are higher than the costs in those locations where rivals have their plants.

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