Which of the Following Is a Reason for Foreign Direct

question 45

Multiple Choice

Which of the following is a reason for foreign direct investment?

• A) To reduce costs of doing business
• B) To protect domestic markets
• C) To protect foreign markets
• D) All of the above

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Definitions:

Coase Theorem

A principle that asserts that if property rights are clearly defined and transaction costs are negligible, parties will negotiate to resolve conflicts in a way that maximizes economic efficiency.

Smoke-Free Air

Policies or regulations that prohibit smoking in public places to protect people from the harmful effects of secondhand smoke.

Bargaining

The process of negotiating the terms of a transaction or agreement between parties with differing interests.

Coase Theorem

An economic theory that suggests that if property rights are well-defined and transaction costs are minimal, voluntary negotiations will lead to the efficient resolution of disputes regarding resource allocation.