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Which of the following is a way governments can increase the attractiveness of foreign direct investment (FDI) and licensing compared to exporting?
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9. International Trade
Exporting and Importing
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Which of the following is an advantage of exporting?
A
Increased complexity in complying with foreign regulations
B
Greater exposure to foreign exchange risk
C
Access to larger markets and increased sales opportunities
D
Higher transportation costs compared to domestic sales
Guida verificata passo dopo passo1
Step 1: Understand the concept of exporting in microeconomics, which involves selling goods or services produced in one country to customers in another country.
Step 2: Identify the potential advantages of exporting, such as access to larger markets, increased sales opportunities, and potential economies of scale.
Step 3: Recognize the common disadvantages or challenges of exporting, including increased complexity in complying with foreign regulations, greater exposure to foreign exchange risk, and higher transportation costs compared to domestic sales.
Step 4: Compare the options given in the problem to distinguish which are disadvantages and which represent advantages of exporting.
Step 5: Conclude that 'Access to larger markets and increased sales opportunities' is an advantage of exporting, while the other options are disadvantages or costs associated with exporting.
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