Deck 9: International Factor Movements and Multinational Enterprises

Question 1

Imagine that the Brazilian aircraft manufacturer Embraer purchases a 10 percent share of a Canadian aircraft distribution company, in order to facilitate the marketing and sales of its aircraft in Canada.This is an example of

A) portfolio investment.
B) forward integration.
C) conglomerate integration.
D) horizontal integration.

Answer 1

B

Question 2

Which of the following would BEST explain why foreign direct investment might be attracted to the United States?

A) U.S. price ceilings that hold down the price of energy
B) U.S. wage rates exceeding the productivity of U.S. labor
C) artificially high prices being charged for the stock of U.S. firms
D) anticipations of future reductions in U.S. tariff levels

Answer 2

A

Question 3

Which of the following BEST refers to the outright construction or purchase abroad of productive facilities, such as manufacturing plants, by domestic residents?

A) foreign direct investment
B) portfolio investment
C) short-term capital investment
D) long-term capital investment

Answer 3

A

Question 4

Firms undertake multinational operations in order to

A) hire low-wage workers.
B) manufacture in nations they have difficulty exporting to.
C) obtain necessary factor inputs.
D) All of these are correct.

Question 5

During the 1980s, American oil companies acquired nonenergy companies (e.g., copper, auto components) in response to anticipated decreases in investment opportunities in oil.This type of diversification is referred to as

A) horizontal integration.
B) conglomerate integration.
C) forward vertical integration.
D) backward vertical integration.

Question 6

Which of the following is NOT a significant motive for the formation of multinational enterprises?

A) avoiding tariffs by obtaining foreign manufacturing facilities
B) obtaining the benefits from overseas comparative advantages
C) the acquisition of natural resource supply sources
D) subsidies granted by the home government to overseas corporations

Question 7

In recent years, the LARGEST amount of U.S.direct investment abroad has occurred in

A) Latin America.
B) Europe.
C) China.
D) Russia.

Question 8

Which type of multinational diversification occurs when the parent firm establishes foreign subsidiaries to produce intermediate goods going into the production of finished goods?

A) forward vertical integration
B) backward vertical integration
C) forward horizontal integration
D) backward horizontal integration

Question 9

Suppose that a steel manufacturer headquartered in Japan sets up a subsidiary in Canada to produce steel.This practice is referred to as

A) conglomerate integration.
B) forward vertical integration.
C) backward vertical integration.
D) horizontal integration.

Question 10

The largest share of U.S.direct investment abroad has recently gone to

A) Canada.
B) China.
C) Europe.
D) Latin America.

Question 11

Which of the following are the economic forces underlying the international flow of goods and services?

A) Productive factors move from nations where they are scarce to nations where they are abundant.
B) Productive factors flow in response to differences in returns when they are less than the costs of moving from one country to another.
C) Productive factors move for reasons that are significantly different from those economic forces that explain the international movement flow of goods and services.
D) Productive factors move from where they are abundant to where they are scarce.

Question 12

In recent years, MOST foreign direct investment in the United States has come from

A) Europe.
B) China.
C) Latin America.
D) Russia.

Question 13

Imagine that Amazon purchases a Japanese grocery store chain and begins home delivery of groceries in Japan.This is an example of

A) horizontal integration.
B) vertical integration.
C) conglomerate integration.
D) backward integration.

Question 14

Imagine that Microsoft is having difficulty selling laptops in Kenya because of differences in local tastes.It decides to build a subsidiary in Kenya.This is an example of a _______________ motive for foreign direct investment.

A) cost factor
B) demand factor
C) country risk
D) backward integration

Question 15

Imagine that in 2016 a U.S.firm acquired a plant in France.In 2017 that plant accounted for 10 percent of the U.S.firm's sales.Why is the U.S.firm NOT a multinational enterprise?

A) The U.S. firm IS a multinational enterprise because it engaged in foreign direct investment.
B) Its foreign sales took place in a different year than its foreign acquisition.
C) Because of its trade agreements with France, a U.S. firm operating there is not considered multinational.
D) Its foreign sales are less than 25 percent.

Question 16

The source (home) location of most of the world's leading multinational enterprises is

A) North America and Europe.
B) North America and Asia.
C) Europe and South America.
D) Europe and Asia.

Question 17

Imagine that a U.S.firm issues a press release regarding its intentions to acquire a foreign firm, a competitor.This competitor is located in a country with cheaper raw materials, more productive labor, and lower corporate tax rates.Which of the following factors is consistent with a demand motive for foreign direct investment?

A) The foreign firm is a competitor.
B) There are cheaper raw materials.
C) There is more productive labor.
D) None of these are correct.

Question 18

MOST foreign direct investment in the United States occurs in

A) finance and insurance.
B) information technology.
C) manufacturing.
D) mining and extraction.

Question 19

Apple develops new iPhones in the United States but builds them overseas.Which type of integration is this?

A) conglomerate
B) vertical
C) horizontal
D) forward

Question 20

Suppose that an American automobile manufacturer establishes foreign subsidiaries to market the automobiles.This practice is referred to as

A) forward vertical integration.
B) forward conglomerate integration.
C) backward vertical integration.
D) backward conglomerate integration.

Question 21

The decision to establish foreign manufacturing operations through direct investment or licensing depends on

A) the extent to which capital is used in the production process.
B) the size of the foreign market.
C) the amount of fixed cost a firm must bear when establishing an overseas facility.
D) All of these are correct.

Question 22

Concerning the decision by an American to lend or invest abroad, which of the following countries is generally considered to be the least risky?

A) United States
B) Singapore
C) China
D) Ukraine

Question 23

Suppose that regardless of the amount of production, a subsidiary's per unit costs are always less than a local firm's.If there are significant tariffs, in this case ________________is likely to be the lowest-cost method of supplying goods abroad.

A) licensing
B) subsidiary production
C) direct exporting
D) vertical integration

Question 24

Trade analysis involving multinational enterprises is in agreement with conventional trade analysis in that both emphasize

A) absolute cost differentials rather than comparative cost differentials.
B) the international movement of factor inputs rather than finished goods.
C) purely competitive markets rather than imperfectly competitive markets.
D) that production will take place in a low-cost country.

Question 25

A U.S.firm is deciding on whether or not to build a production facility in Uruguay.All else equal, if Uruguay has a relatively high inflation rate, it therefore has relatively high

A) economic risk.
B) political risk.
C) investment risk.
D) financial risk.

Question 26

Which of the following is an example of a cost motive for the formation of multinational enterprises?

A) avoiding tariffs by obtaining foreign manufacturing facilities
B) to utilize less productive foreign labor
C) to have production farther from markets for the finished good
D) to pay higher corporate taxes

Question 27

Trade analysis involving multinational enterprises DIFFERS from our conventional trade analysis in that multinational enterprise analysis emphasizes

A) intrafirm sales where prices are determined by factors other than a competitive pricing system.
B) the international movement of finished goods.
C) purely competitive markets rather than imperfectly competitive markets.
D) portfolio investments rather than direct foreign investments.

Question 28

Suppose a U.S.CEO wants to expand her firm's manufacturing production.She argues it should occur in another country, because U.S.wages are 15 percent higher.Which of the following will refute her argument?

A) U.S. workers are 20 percent more productive.
B) The foreign country is closer to a source of a needed raw material.
C) The foreign country has a free trade agreement with an important market for the finished good.
D) None of these are correct.

Question 29

Suppose that Samsung's production costs are the same in both China and India.Also suppose that Samsung can produce cellphones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones.If customers in India demand 100 million phones and customers in China demand 200 million phones, Samsung's lowest cost option is to

A) produce phones only in India and export phones to China.
B) produce phones only in China and export phones to India.
C) produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand.
D) produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand.

Question 30

Suppose that a local firm in a foreign market is incapable of adapting its operations to a multinational enterprise's production process.In this case______________ is not the lowest-cost method of supplying goods abroad.

A) licensing
B) foreign direct investment
C) direct exporting
D) backward integration

Question 31

Once a firm knows that foreign demand exists, its next step is to

A) use foreign direct investment.
B) negotiate a licensing agreement with the foreign government.
C) cease operations in its home country.
D) ascertain the lowest-cost method of supplying goods abroad.

Question 32

A U.S.firm is deciding on whether or not to build a production facility in Tunisia.All else equal, if Tunisia has very little corruption, it therefore has relatively low

A) economic risk.
B) political risk.
C) investment risk.
D) financial risk.

Question 33

Suppose that Samsung's production costs are the same in both China and India.Also suppose that Samsung can produce cellphones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones.If customers in India demand 100 million phones and customers in China demand 200 million phones, and there is an Indian tariff of $10 per phone, Samsung's lowest cost option is to

A) produce phones only in India and export phones to China.
B) produce phones only in China and export phones to India.
C) produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand.
D) produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand.

Question 34

Suppose that there are significant costs associated with coordinating a subsidiary with the parent organization and assessing the market potential of a foreign country.If there are also significant tariffs, in this case ________________is likely to be the lowest-cost method of supplying goods abroad.

A) licensing
B) subsidiary production
C) direct exporting
D) conglomerate integration

Question 35

A U.S.firm is deciding on whether or not to build a production facility in Montenegro.All else equal, if Montenegro has a very low foreign debt as a percentage of GDP, it therefore has relatively low

A) economic risk.
B) political risk.
C) investment risk.
D) financial risk.

Question 36

Suppose that Samsung's production costs are the same in both China and India.Also suppose that Samsung can produce cellphones in China for an average cost of $10 per phone for 300 million phones, $12 per phone for 200 million phones, and $15 per phone for 100 million phones.If customers in India demand 100 million phones and customers in China demand 200 million phones, and there are transportation costs of $6 per phone, Samsung's lowest cost option is to

A) produce phones only in India and export phones to China.
B) produce phones only in China and export phones to India.
C) produce 100 million phones in India for Indian demand and produce 200 million phones in China for Chinese demand.
D) produce 150 million phones in India for Indian demand and 50 million to export to China and produce 150 million phones in China for Chinese demand.

Question 37

Trade analysis involving multinational enterprises DIFFERS from our conventional trade analysis in that multinational enterprise analysis emphasizes

A) absolute cost differentials rather than comparative cost differentials.
B) the international movement of factor inputs rather than finished goods.
C) purely competitive markets rather than imperfectly competitive markets.
D) portfolio investments rather than direct foreign investments.

Question 38

Concerning the decision by an American to lend or invest abroad, which of the following countries is generally considered to be the most risky?

A) Germany
B) Switzerland
C) Singapore
D) Sudan

Question 39

Suppose that General Motors per unit costs for a Mexican subsidiary are $17,000 per truck for 10,000 trucks, and $17,500 per truck for 12,000 trucks.A local Mexican firm can produce the same amounts at $16,500 and $18,000.These trucks can also be produced in Michigan and exported to Mexico at a constant cost of $18,500 per truck.If Mexican demand for trucks is 10,000 trucks, General Motor's lowest cost option is to

A) use a licensing agreement and have the Mexican firm produce the trucks.
B) use a Mexican subsidiary.
C) export the trucks to Mexico.
D) export 5,000 trucks to Mexico and use a Mexican subsidiary for the other 5,000 trucks.

Question 40

Suppose that a steel company locates a production facility near a source of iron.This is an example of

A) a demand factor motive for foreign direct investment.
B) a cost factor motive for foreign direct investment.
C) a government policy motive for foreign direct investment.
D) a raw material motive for foreign direct investment.

Question 41

American labor unions maintain that U.S.multinational enterprises

A) export American jobs by investing overseas.
B) export American jobs by keeping investment in the United States.
C) import cheap foreign workers by shifting U.S. investment overseas.
D) import cheap foreign workers by keeping U.S. investment at home.

Question 42

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions, indicated by MC₁=AC₁, which result from changes in work rules by Venture Company employees that led to higher worker productivity.Compared to the original competitive equilibrium, the net effect of Venture Company's formation on welfare now is

A) no change.
B) gain of $2.50.
C) gain of $5.50.
D) loss of $5.50.

Question 43

Suppose General Motors charges its Mexican subsidiary $1 million for auto assembly equipment that could be purchased on the open market for $800,000.This practice is BEST referred to as

A) international dumping.
B) cost-plus pricing.
C) transfer pricing.
D) technological transfer.

Question 44

Most of Toyota's auto plants in the United States are located in

A) the Pacific Northwest states, such as Washington and Idaho.
B) mountain states such as Wyoming and Montana.
C) southern states such as Tennessee, Kentucky, and Alabama.
D) northeastern states such as Main, Vermont, and New Hampshire

Question 45

Multinational enterprises may provide benefits to their SOURCE (home) countries because they may

A) secure raw materials for the source country.
B) shift source country technology overseas via licensing.
C) export products, which reflect source-country comparative disadvantage.
D) result in lower wages for source-country workers.

Question 46

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.Compared to the market equilibrium position achieved by SKG and Timken as competitors, Venture Company as a monopoly leads to a deadweight welfare loss at

A) $2.
B) $4.
C) $6.
D) $8.

Question 47

Which business device involves the creation of a new business by two or more companies, often for a limited period of time?

A) multinational enterprise
B) international joint venture
C) horizontal merger
D) vertical merger

Question 48

Multinational enterprises

A) increase the transfer of technology between nations.
B) make it harder for nations to foster activities of comparative advantage.
C) always enjoy political harmony in nations where their subsidiaries operate.
D) require governmental subsidies in order to conduct worldwide operations.

Question 49

Since the 1980s, Japanese auto companies have invested billions of dollars in U.S.based assembly facilities, known as transplants.This investment is explained by all of the following EXCEPT the desire to

A) silence critics who insist that autos sold in the United States must be built there.
B) avoid the potential import barriers of the United States.
C) provide a hedge against fluctuations in the dollar-yen exchange rate.
D) All of these are correct.

Question 50

The market power effect of an international joint venture can lead to welfare losses for the domestic economy unless offset by cost reductions.Which type of cost reduction would NOT lead to offsetting welfare gains for the overall economy?

A) research and development generating improved technology
B) development of more productive machinery
C) new work rules promoting worker efficiency
D) lower wages extracted from workers

Question 51

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.Suppose that SKG and Timken jointly form a new firm, Venture Company, whose ball bearings replace the output sold by the parents in the domestic market.Assuming that Venture Company operates as a monopoly and that its costs equal MC₀=AC₀, the firm's price, output, and total profit would respectively equal

A) $6, 2 units, $4.
B) $4, 2 units, $2.
C) $6, 4 units, $4.
D) $4, 4 units, $2.

Question 52

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.With SKF and Timken behaving as competitors, the equilibrium price and output respectively equal

A) $4 and 2 units.
B) $4 and 4 units.
C) $6 and 2 units.
D) $6 and 4 units.

Question 53

International joint ventures can lead to welfare losses when the newly established firm

A) adds to the preexistent productive capacity.
B) enters markets neither parent could have entered individually.
C) yields cost reductions unavailable to parent firms.
D) gives rise to increased amounts of market power.

Question 54

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D0.
? ?


-Consider Figure 9.2, at labor market equilibrium, _____ workers are hired at a wage rate of $____ per hour, while total labor income equals $____.

A) 2, 12, 24
B) 2, 12, 36
C) 3, 9, 27
D) 3, 9, 36

Question 55

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.At the equilibrium price, the domestic economy attains ____ of economic surplus.

A) $4
B) $8
C) $12
D) $16

Question 56

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions, indicated by MC₁=AC₁, which result from wage concessions accepted by Venture Company employees.Compared to the original competitive equilibrium, the net effect of Venture Company's formation on welfare now is

A) no change.
B) gain of $5.50.
C) loss of $2.50.
D) loss of $3.50.

Question 57

Multinational enterprises face problems since they

A) cannot benefit from the advantages of comparative advantage.
B) may raise political problems in countries where their subsidiaries operate.
C) can invest only at home, but not overseas.
D) can invest only overseas, but not at home.

Question 58

Figure 9.1 illustrates the market conditions facing SKF and Timken, initially operating as competitors in the domestic ball bearing market. Each firm realizes constant long-run costs, MC₀=AC₀.
Figure 9.1. International Joint Venture



-Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions, indicated by MC₁=AC₁, which result from technological advances.Compared to the original competitive equilibrium, the net effect of Venture Company's formation on welfare now is

A) no change.
B) gain of $5.50.
C) gain of $2.50.
D) loss of $5.50.

Question 59

Which term best describes the Iran Oil Investment Co.?

A) multinational enterprise
B) international joint venture
C) multilateral contract
D) international commodity agreement

Question 60

All of the following are potential advantages of an international joint venture EXCEPT

A) sharing research and development costs among corporations.
B) forestalling protectionism against imports.
C) establishing work rules promoting higher labor productivity.
D) operating at diseconomy-of-scale output levels.

Question 61

In 2016, three of the world's five largest corporations were based in

A) the U.S.
B) Germany.
C) Canada.
D) China.

Question 62

The "brain drain" is

A) of concern primarily to host countries.
B) of concern primarily to source countries.
C) the movement of capital from a source country to a host country.
D) the simultaneous movements of capital and labor from a source country to a host country.

Question 63

Which of the following do American labor unions NOT accuse U.S.multinational firms of?

A) They enjoy unfair advantages in taxation.
B) They export jobs by shifting technology overseas.
C) They export jobs by shifting investment overseas.
D) They operate at output levels where scale economies occur.

Question 64

Research conducted by the National Bureau of Economic research suggests that, while in the _________immigration lowers average wages, in the ___________wages________.

A) short run, long run, also decrease
B) long run, short run, also decrease
C) long run, short run, increase
D) short run, long run, remain essentially unchanged

Question 65

24.Multinational enterprises face problems since they

A) cannot benefit from the advantages of comparative advantage.
B) may raise political problems in countries where their subsidiaries operate.
C) can invest only at home, but not overseas.
D) can invest only overseas, but not at home.

Question 66

Figure 9.3 Figure 9.3 represents the Mexican labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers. The demand schedule of labor is denoted by DMexico.


-Consider Figure 9.3.At labor market equilibrium with supply S₀, _____ workers are hired at a wage rate of ____ pesos per hour, while total labor income equals ____ pesos.

A) 6, 7, 42
B) 6, 6, 36
C) 7, 7, 49
D) 7, 6, 42

Question 67

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D0.
? ?


-Consider Figure 9.2.At labor market equilibrium, income earned by U.S.capital owners equals

A) $3.
B) $6.
C) $9.
D) $12.

Question 68

____ refers to highly educated and skilled people who migrate from poor developing countries to wealthy industrial countries.

A) Direct investment
B) Portfolio investment
C) Transfer pricing
D) Brain drain

Question 69

The least common type of migration pattern is for people to migrate permanently from

A) rich nations to rich nations.
B) poor nations to poor nations.
C) poor nations to rich nations.
D) rich nations to poor nations.

Question 70

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D0.
? ?


-Consider Figure 9.2.Assume that Mexican labor migration yields a new labor supply curve, S₁, which is the combination of domestic labor supply and Mexican labor.As the result of the Mexican migration to the United States

A) U.S. capital owners lose income.
B) native U.S. workers lose income.
C) U.S. capital owners and native U.S. workers lose income.
D) U.S. capital owners and native U.S. workers gain income.

Question 71

Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native U.S. workers. The demand schedule of labor is denoted by D0.
? ?


-Consider Figure 9.2.Policies that permit Mexican workers to freely migrate to the United States would likely be resisted by

A) U.S. capital owners.
B) native U.S. workers.
C) U.S. capital owners and native U.S. workers.
D) neither U.S. capital owners nor native U.S. workers.

Question 72

The ______ refers to the price charged for goods sold to a subsidiary of a multinational enterprise by another subsidiary in another country

A) corporate price
B) transfer price
C) monopoly price
D) dumping price

Question 73

Figure 9.3 Figure 9.3 represents the Mexican labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers. The demand schedule of labor is denoted by DMexico.


-Consider Figure 9.3.If Honduran migration to Mexico results in the labor force increasing to 12 workers, denoted by labor supply curve S₁, the:

A) wage rate for native Mexican workers decreases and the payments to Mexican capital owners increases.
B) wage rate for native Mexican workers decreases and the payments to Mexican capital owners decreases.
C) wage rate for native Mexican workers increases and the payments to Mexican capital owners increases.
D) wage rate for native Mexican workers increases and the payments to Mexican capital owners decreases.

Question 74

Immigration tends to reduce the incomes of all factors of production.

Question 75

47.Joint ventures may lead to

A) welfare increases.
B) welfare decreases.
C) no changes in welfare.
D) All of these are correct.

Question 76

Critics of U.S.trade and immigration policy maintain that

A) it has depressed wages for many Americans
B) it has increased the supply of less educated workers in the United States
C) it has an adverse impact on the employment opportunities of less-skilled, American workers
D) All of these are correct

Question 77

Who tends to benefit from increased immigration?

A) owners of capital in the home country
B) labor in the home country
C) both owners of capital and labor in the home country
D) neither owners of capital nor labor in the home country

Question 78

Foreign direct investment typically occurs when

A) the earnings of the parent company are invested in plant expansion overseas.
B) the parent company transfers jobs overseas.
C) the parent company closes its foreign production plants.
D) the parent company purchases bonds of foreign governments.

Question 79

Figure 9.3 Figure 9.3 represents the Mexican labor market. Assume that labor and capital are the only factors of production. Also assume the initial supply schedule of labor is denoted by S0 and consists entirely of native Mexican workers. The demand schedule of labor is denoted by DMexico.


-Consider Figure 9.3.At labor market equilibrium, the income earned by Mexican capital owners equals

A) 3 pesos.
B) 6 pesos.
C) 9 pesos.
D) 12 pesos.

Question 80

"Guest worker" programs generally result in temporary migration of workers from

A) wealthy nations to wealthy nations.
B) wealthy nations to impoverished nations.
C) impoverished nations to wealthy nations.
D) impoverished nations to impoverished nations.