Which of the following provides a good explanation of why multinational firms exist?
A. Internalization advantages that favor direct investment over contracting with independent foreign firms
B. The need to shift financial capital between countries
C. Firms lack inherent knowledge of foreign laws, procedures, and practices.
D. Location factors that favor exporting over foreign production
Answer: A
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Why does the government index income tax rates to inflation?
a. To avoid people paying less in taxes when there is inflation b. To avoid people moving to a higher tax bracket when their purchasing power has increased c. To avoid people paying less in taxes when their real purchasing power has not increased d. To avoid people paying more in taxes when their real purchasing power has not increased
When people exchange money for financial assets, the _____ rises.
Fill in the blank(s) with the appropriate word(s).
If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is
A) 60 units. B) 54 units. C) 48 units. D) 5 units.
If the Fed were to reduce the legal reserve ratio, we would expect:
A. lower interest rates, an expanded GDP, and a higher rate of inflation. B. lower interest rates, an expanded GDP, and a lower rate of inflation. C. higher interest rates, a contracted GDP, and a higher rate of inflation. D. higher interest rates, a contracted GDP, and a lower rate of inflation.