The ________ Theory States That When an Aspect of the Market

question 15

Multiple Choice

The ________ theory states that when an aspect of the market makes a transaction less efficient than it could be,a company will undertake foreign direct investment to internalize the transaction and thereby remove the efficiency-reducing aspect.

• A) market power
• B) eclectic
• C) international product life cycle
• D) market imperfections

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Definitions:

Conditioned Stimulus

A formerly neutral stimulus that becomes capable of triggering a conditioned response after it is associated with an unconditioned stimulus.

Unconditioned Response

An automatic reaction to a stimulus that occurs naturally, without the need for prior learning or conditioning.

Conditioned Response

A learned response to a previously neutral stimulus that has become conditioned by being paired with an unconditioned stimulus.

UCS

Unconditioned Stimulus; a stimulus that triggers a naturally occurring response without the need for prior learning.