While There Is No Comprehensive Theory of FDI, Many Existing

question 81

Multiple Choice

While there is no comprehensive theory of FDI, many existing theories emphasize

• A)imperfections in product markets.
• B)imperfections in capital markets.
• C)imperfections in labor markets.
• D)all of the above

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Definitions:

Economic Efficiency

An economic state where every resource is optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Deadweight Losses

Losses in total surplus that occur when a market is not in competitive equilibrium, often due to taxes or subsidies.

Economic Efficiency

A situation where all resources are allocated in a way that maximizes the total benefit to society or minimizes waste.

External Cost

A cost that a transaction or activity imposes on a party who is not involved in the transaction, often not reflected in market prices.