Question

Japanese auto companies manufacture cars in the United States for each of the following reasons EXCEPT ________.

Question 45 options:

	to combat the costs of being home to the world's highest paid workers
	to offset the risk of currency fluctuations
	to be closer to customers
	to defuse political concerns regarding the U.S. trade deficit with Japan

Answer 1

Look for my comments in orange color text:

to combat the costs of being home to the world's highest paid workers Japan is not the home to the world's highest paid workers. This statement is misplaced, therefore it's the option we are looking for in the question.

to offset the risk of currency fluctuations Well, instead of manufacturing in US, had Japan exported the domestically manufactured cars to US, it would have involved the foreign current transactions, involving the forex fluctuation risks as well. This option is not what we are looking for.

to be closer to customers Making cars in US enables Japanese companies to understand, connect with and serve the US customers well. This option is also not what we are looking for.

to defuse political concerns regarding the U.S. trade deficit with Japan By manufacturing in US, Japanese auto companies actually let the economic value of the cars avoid being a part of balance of payment account (BoP). U.S. often remain wary of its trade deficit with several countries. Japan is no exception to this. This option is also not what we are looking for.