MNCs May Undertake Overseas Investment Projects in a Foreign Country

question 29

Multiple Choice

MNCs may undertake overseas investment projects in a foreign country, despite the fact that local firms may enjoy inherent advantages. This implies that

• A)MNCs are making a mistake in this case and will have to eventually withdraw.
• B)MNCs should have significant advantages over local firms such as comparative advantages due to intangible assets.
• C)the local firms will not have to compete due to their inherent advantages over the foreigners.
• D)none of the above

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Definitions:

Cartel Breakdown

The disintegration or failure of a cartel, which is an agreement among competing firms to control prices or exclude entry of a new competitor in the market.

Total Output

The total volume of goods and services produced by an economy over a specific period of time, also known as Gross Domestic Product (GDP).

Accommodation

Adjustments or modifications made to the work environment or job responsibilities to suit the needs of employees, often related to disability or religion.

Conflict Management

The practice of identifying and handling conflicts in a sensible, fair, and efficient manner.