If Intel moves first and makes a large investment in a chip fabrication plant in Bolivia in exchange for tax credits, Intel has made ________ and Bolivia ________.
A)a tactical error; will nationalize the plant
B)a specific investment; will create the tax credit
C)a specific investment; has a hostage
D)a general investment; no longer has to grant the tax credits

Question

Quizplus · Accepted Answer

Intel's large investment in a chip fabrication plant is a specific investment because it is tailored to a particular location and purpose. Bolivia has a "hostage" in the sense that Intel's investment is tied to the location, giving Bolivia leverage over Intel.

If Intel Moves First and Makes a Large Investment in a Chip