The Ways That a Foreign Government Can Adversely Affect the Risk

question 21

Multiple Choice

The ways that a foreign government can adversely affect the risk of a foreign project include all EXCEPT:

• A) Change tax laws in a way that adversely impacts the firm.
• B) Impose laws related to labor, wages, and prices that are more restrictive than those applicable for domestic firms.
• C) Remove tariffs and quotas on any imports.
• D) Disallow any remittance of funds from the subsidiary to the parent firm for either a limited period of time or the duration of the project.

Recognize the effects of price ceilings on consumer and producer surplus.

Analyze the impact of market equilibrium on consumer and producer surplus.

Identify the consequences of government intervention in competitive markets through price ceilings.

Analyze the effects of price ceilings on market quantity and deadweight loss.