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Which of the following best defines trade costs?

• Only the costs directly related to production

• Additional expenses beyond production incurred during export

• Costs solely associated with marketing and distribution

• Expenses incurred during the importation process

What types of costs are included in trade costs?

• Only transportation and insurance costs

• Only tariffs and duties

• A wide range of expenses beyond production costs

• Solely marketing costs

Which of the following is NOT part of trade costs?

• Tariffs and duties

• Marketing and distribution costs

•  Production costs

• Non-tariff barriers

Which strategy is NOT mentioned as a way to mitigate trade costs  ?

• Investing in advanced technology for production

• Negotiating favorable trade agreements

• Utilizing free trade zones

•  Streamlining customs clearance procedures

What is a potential benefit for export-oriented firms when trade barriers are reduced or eliminated?

• Decreased competition

• Stagnant sales

• Increased sales and profits

• Limited market access

What characteristic is highlighted as beneficial for companies in a more open trade environment?

• Rigidness in adapting to market conditions

• Slow innovation

• Quick adaptation to changing market conditions

• Limited access to new markets

Which type of firms may find it difficult to compete with more efficient foreign rivals?

• Firms with efficient production processes

• Firms with outdated technology

• Firms that rely on protectionist measures

• Firms with strong domestic market presence

How is foreign direct investment (FDI) distinguished from other forms of investment?

• It involves ownership or control of a subsidiary in another country

• It exclusively involves investment in foreign stocks

• It only occurs within the same country

• It is not distinguishable from other forms of investment

According to the passage, which type of countries are typically involved in horizontal FDI?

• Developed countries

• Developing countries

• Both developed and developing countries

• None of the above

What factor plays a more important role in horizontal FDI decisions compared to production cost differences?

• Trade and transport costs

• Labor cost differences

• Currency exchange rates

• Regulatory environment