Factors Supporting Global Expansion for Multinational Companies
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Questions and Answers

What factor of production can the concept of arbitrage be applied to?

  • Land
  • Capital (correct)
  • Labor
  • Entrepreneurship

    • What does arbitrage involve apart from simple trading opportunities?

  • Risk-free transactions
  • Taking advantage of price differences (correct)
  • Long-term investments
  • Speculative investment

    • What is an example of arbitrage mentioned in the text?

  • Borrowing cheap capital to invest in a country with expensive capital (correct)
  • Buying and selling stocks on the same day
  • Trading goods between countries for profit
  • Investing in high-risk assets for potential high returns

    • In what way can a firm use arbitrage in the context of borrowing and investing?

    <p>Borrowing in a country with expensive capital to fund a project in a country with cheap capital</p> Signup and view all the answers

    Can arbitrage only be applied to trading opportunities?

    <p>No, it can be applied to any factor of production</p> Signup and view all the answers

    What does arbitrage involve apart from simple trading opportunities?

    <p>Utilizing any factor of production</p> Signup and view all the answers

    In what way can a firm use arbitrage in the context of borrowing and investing?

    <p>Borrowing where capital is cheap and investing where capital is expensive</p> Signup and view all the answers

    What factor of production can the concept of arbitrage be applied to?

    <p>Any factor of production</p> Signup and view all the answers

    Can arbitrage only be applied to trading opportunities?

    <p>No, it can be applied to any factor of production</p> Signup and view all the answers

    What is an example of arbitrage mentioned in the text?

    <p>Borrowing anywhere in the world where capital is cheap and using it to fund a project in a country where capital is expensive</p> Signup and view all the answers

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