Question

The United States requires that 50 percent of all parts used to construct an automobile in the United States be manufactured in the United States. As a result of this, when Toyota Motor Company built automobile manufacturing plants in Tennessee and Ohio, it faced economic risks associated with _____.

Select one:
a. exchange controls
b. local-content laws
c. export restrictions
d. tax controls
e. price controls

Answer 1

The correct answer is letter "B": local-content laws.

Step-by-step explanation:

Local-content Laws or Local-Content Requirements (LCRs) regulate the manufacturing industry of a country by establishing limits and requests on the productions of certain goods. LCRs mainly promote domestic investment but represent an entry barrier for many firms interested in outsourcing their operations.