Scenario: Blickinstock at the Crossroads
Auto parts supplier, Blickinstock Ltd., would like to expand its presence in Latin America. To that end, Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary. Keith Moon, Blickinstock's vice president of global business development, will be making a presentation to the board outlining the company's options.
-If Blickinstock's home government tries to stop the company from investing in Latin America,the government is most likely trying to ________.
A) protect its balance of payments
B) prevent a monopoly situation from occurring
C) discourage the entry of a "sunset" company
D) protect the "sunset" companies in Latin America

Question

Quizplus · Accepted Answer

If the home government is trying to stop Blickinstock from investing in Latin America, it is most likely because they want to protect their balance of payments. The government may be concerned about an outflow of funds that could affect their overall balance of payments, which is a measure of a country's trade and financial transactions with other countries.