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 may be trying to ________.
A)protect its balance of payments
B)prevent a monopoly situation from occurring
C)instill an invest-at-home focus among its home companies
D)determine whether Blickinstock is a "sunset industry" company

Question

Quizplus · Accepted Answer

If the home government tries to stop Blickinstock from investing in Latin America, it may be doing so in order to protect its balance of payments, which is a measurement of the flow of goods, services, and capital between a country and the rest of the world. The government may be concerned that foreign investment, like that of Blickinstock, could worsen the country's balance of payments by increasing the outflow of capital.