FDI Has Been Rising for All of the Following Reasons

question 50

Multiple Choice

FDI has been rising for all of the following reasons except:

• A)the globalization of the world economy.
• B)the general increase in trade barriers over the past 30 years.
• C)firms are trying to circumvent trade barriers.
• D)there is a shift toward democratic political institutions and free market economies.

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Definitions:

Variable Cost

Expenditures that are directly correlated with the volume of production or output level.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including expenses related to running the factory.

Operating Leverage

A measure of how revenue growth translates into growth in operating income. It is an indicator of the fixed versus variable costs in a company's operation.

Fixed Costs

Expenses that do not change with the level of output or sales within a certain range and period.