As long as _____ and _____ are low enough, foreign direct investment can be used to reduce total costs by locating different stages of overall production in different countries.
A)foreign demand; transport costs
B)transport costs; trade barriers
C)trade barriers; domestic demand
D)domestic taxes; foreign demand

Question

Quizplus · Accepted Answer

Foreign direct investment can be used to reduce total costs by taking advantage of lower transport costs and avoiding trade barriers in different countries. This allows different stages of the production process to be located in different countries, leading to lower overall costs. Factors such as domestic taxes and foreign demand may also influence foreign direct investment, but they are not directly related to reducing total costs through production location strategies.

As Long as _____ and _____ Are Low Enough, Foreign

As Long as _ and _ Are Low Enough, Foreign