Financing from the parent company to its foreign affiliates is generally a small percentage of total funding because
A. most foreign governments have imposed quotas of foreign investment in their domestic economy.
B. the returns on such investment are taxed at very high rates.
C. the parent firm wants to reduce the risks to which its foreign activities are exposed.
D. most major home-country governments limit investment in foreign firms by their domestic firms.
Answer: C
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If the slope of the per-worker production function is 1/4 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?
A) Real GDP per hour worked will increase by $10,000. B) Real GDP per hour worked will decrease by $40.000. C) Real GDP per hour worked will increase by $40,000. D) Real GDP per hour worked will increase by $2,500.
The equation for the spending multiplier is:
a. 1 / (1 ? MPC). b. 1 ? MPC. c. 1 ? (MPC ? MPS). d. MPC/MPS. e. none of these.
GDP can be calculated by the value-added approach, which
a. is useful in avoiding double counting. b. includes only the value-added portion from the sale of goods and services. c. includes the revenue a firm receives from selling a product minus the amount paid for goods purchased from other firms. d. All of the above correct.
Stabilization policy may be necessary to modify or counteract volatile changes in aggregate demand
a. True b. False Indicate whether the statement is true or false