Direct Foreign Investment Would Typically Be Welcomed If

question 39

Multiple Choice

Direct foreign investment would typically be welcomed if:

• A) the products to be produced are substitutes for other locally produced products.
• B) people from the country of the company's headquarters are transferred to the foreign country to work at the subsidiary.
• C) the products to be produced are going to be exported.
• D) All of these are correct.

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Definitions:

Net Exports

The value of a country's total exports minus its total imports, a critical component of a nation's gross domestic product (GDP).

Saving

The act of setting aside a portion of current income for future use, typically by depositing money in savings accounts or investing in securities.

Diminishing Returns

The decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, keeping all other factors constant.

Foreign Portfolio Investment

Investment in financial assets from another country, such as stocks or bonds, which does not provide the investor with direct control over the assets.