What Is the Primary Advantage of Licensing

question 25

Multiple Choice

What is the primary advantage of licensing?

• A) It helps a firm avoid the development costs associated with opening a foreign market.
• B) It gives a firm the tight control over manufacturing, marketing, and strategy.
• C) It helps a firm achieve experience curve and location economies.
• D) It increases a firm's ability to utilize a coordinated strategy.

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Definitions:

Lender of Last Resort

A function usually performed by a central bank to provide funds to financial institutions facing liquidity problems to prevent their failure and systemic risks to the economy.

Excess Reserves

The amount of reserves held by banks over and above the legally mandated requirement.

Destroyed Money

Money that has been taken out of circulation, either physically by damage or dematerialization, or digitally by central authorities to control the money supply.

Liquidity Trap

A scenario where low interest rates and high savings rates make it difficult for monetary policy to boost economic growth.