To Encourage Inward FDI,it Is Increasingly Common for Governments to

question 80

Multiple Choice

To encourage inward FDI,it is increasingly common for governments to

• A)offer tax concessions to foreign firms that invest in their countries.
• B)exclude foreign companies from specific industries.
• C)require that local investors own a significant proportion of the equity in a joint venture.
• D)impose high custom duties on foreign firms.
• E)prohibit MNEs from joining a cartel.

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Definitions:

Price Elasticity

Measures the responsiveness of the quantity demanded of a good to a change in its price.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually do pay.

Easton Bats

A brand known for manufacturing sports equipment, particularly high-quality baseball and softball bats.

Burden of the Tax

The distribution of the financial impact of a tax between buyers and sellers in a market.