In the case in which foreign affiliates undertake the same kind of production as the parent firm, the affiliate ________ some trade in that product. The affiliate also ________ trade through better local marketing of other products produced by the multinational in other countries.
A. expands; expands
B. displaces; displaces
C. displaces; expands
D. expands, displaces
Answer: C
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In the short run, lowering the federal funds rate shifts the aggregate demand curve ________ so that real GDP ________ and the price level ________
A) leftward; decreases; rises B) rightward; increases; rises C) rightward; decreases; rises D) leftward; decreases; falls E) rightward; increases; falls
If net investment spending in a nation is zero, we can conclude that:
a. gross investment exceeds the capital consumption allowance. b. the capital consumption allowance exceeds gross investment. c. imports equal exports. d. gross investment equals the capital consumption allowance. e. no investment goods were produced in the economy.
Ceteris paribus, if the market supply of a product decreases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____
a. increase; increase b. decrease; increase c. decrease; indeterminate d. increase; decrease
One of the major insights by economist John Maynard Keynes about inventories and demand was that if planned inventories:
A. < actual inventories then demand was lower than anticipated. B. > actual inventories then demand was lower than anticipated. C. = actual inventories then demand was higher than anticipated. D. > actual inventories then demand was higher than anticipated.