MNEs Situated in Countries with Small Illiquid and Segmented Markets

question 48

Multiple Choice

MNEs situated in countries with small illiquid and segmented markets are most like:

• A) small domestic U.S. firms in that they must rely on internally generated funds and bank borrowing.
• B) large U.S. MNEs in that they are all MNEs and have worldwide markets and sources of financing.
• C) small domestic U.S. firms in that they have a strong niche market in the U.S.
• D) None of the above is true.

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Definitions:

Specialization

The process by which individuals, firms, or countries focus on producing a narrow range of products or services to gain greater efficiencies and yield higher quality or productivity.

Competitive Industry

An industry characterized by a large number of firms competing against each other, leading to innovation, lower prices, and improved products and services.

Economic Profit

The difference between a company's total revenue and its total costs, including both explicit and implicit costs, serving as a measure of the company's overall financial performance beyond just covering its opportunity costs.

Market Economy

An economic system in which supply and demand from consumers primarily determine what, how, and for whom goods and services are produced.