When a Foreign Company Engages in Riskier Behavior After It

question 21

Multiple Choice

When a foreign company engages in riskier behavior after it has received international investment funds, it is known as

• A) portfolio investment.
• B) moral hazard.
• C) foreign direct investment.
• D) adverse selection.

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Definitions:

Production Possibilities Curves

A graphical representation that shows the maximum possible output combinations of two goods that can be produced with available resources and technology.

Specialization And Trade

An economic concept where individuals or entities focus on producing a limited scope of goods or services to trade for other goods or services rather than trying to produce everything themselves.

Law Of Increasing Opportunity

The principle that the opportunity cost of producing a good increases as more of that good is produced, reflecting trade-offs in resource allocation.

Production Possibilities Curves

A graphical representation that shows the maximum combination of goods and services that can be produced by an economy with given resources and technology.