A firm is more likely to engage in horizontal foreign direct ...

[Lobcity]

A firm is more likely to engage in horizontal foreign direct investment if
 
  A) trade costs are high and there are internal economies of scale.
  B) trade costs are low and there are internal economies of scale.
  C) trade costs are high and there are external economies of scale.
  D) trade costs are low and there are external economies of scale.
  E) trade costs are low and firms experience constant returns to scale in production.

Question 2

If one allows natural resources to be a factor of production, then it is possible to explain the Leontief Paradox for the United States on the grounds that U.S. imports are natural resource intensive.
 
  Indicate whether the statement is true or false

[aruss1303]

Answer to Question 1

A

Answer to Question 2

TRUE
Explanation: This is essentially Vanek's argument.

[Lobcity]

Gracias!

[covalentbond]

Excellent