Which of the Following Is a Home-Country Policy for Limiting

question 98

Multiple Choice

Which of the following is a home-country policy for limiting outward FDI?

• A)eliminating double taxation of foreign income
• B)manipulating tax rules to encourage the firms to invest at home
• C)withdrawing government-backed insurance programs provided to local investors
• D)reducing interest rates earned on domestic investments
• E)prohibiting organizations from entering into a cartel

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Definitions:

Imitation Problem

The potential for a firm’s rivals to produce a close variation of (imitate) a firm’s new product or process, greatly reducing the originator’s profit from R&D and innovation.

R&D

Research and Development; activities in connection with corporate or governmental innovation involving the investigation of new ideas and the development of new products or processes.

Diffusion of Innovation

The process through which a new idea, product, or practice spreads within a population.

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.