FDI Is Risky Because of the Problems Associated With

question 118

Multiple Choice

FDI is risky because of the problems associated with:

• A) sharing a valuable technological know-how with a potential competitor.
• B) increase in the transportation costs, especially for those products that have a low value-to-weight ratio.
• C) doing business in a different culture where the rules of the game may be very different.
• D) the possibility of increase in trade barriers such as import tariffs or quotas.
• E) increased production costs.

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Definitions:

Active Volcano

A volcano that has erupted in the recent past and is considered likely to do so again.

Iron-Nickel Meteorite

A type of meteorite consisting mainly of iron and nickel, typically formed from the core of ancient asteroids.

Continental Crust

The type of Earth’s crust that underlies the continents and the continental shelves; average granitic composition, but includes diverse types of material.

Oceanic Crust

the part of the Earth's crust that underlies the oceans, thinner and denser than continental crust.