The Best Means of Using Direct Foreign Investment (DFI) to Fully

question 15

Multiple Choice

The best means of using direct foreign investment (DFI) to fully benefit from cheap foreign factors of production is probably to:

• A) acquire a competitor that has controlled its local market.
• B) establish a subsidiary in a new market that can sell products produced elsewhere; this allows for increased production and possibly greater production efficiency.
• C) establish a subsidiary in a market that has relatively low costs of labor and land; sell the finished product to countries where the cost of production is higher.
• D) establish a subsidiary in a market in which raw materials are cheap and accessible; sell the finished product to countries in which the raw materials are more expensive.

---

Definitions:

Secondary Reinforcement

An event that has developed its reinforcing properties through its association with primary reinforcements.

Tertiary Reinforcement

A type of reinforcement that is not inherently rewarding but is associated with primary or secondary reinforcers, such as money for humans.

Computational Reinforcement

Involves the application of computational models and algorithms to understand or implement reinforcement learning processes.

Variable-Ratio Schedule

A reinforcement schedule in which a response is rewarded after an unpredictable number of responses, leading to high and steady rates of response.