Which of the Following Would Be an Example of Direct

question 246

Multiple Choice

Which of the following would be an example of direct foreign investment in DVCs?

• A)a grant from the World Bank to build an irrigation project in Kenya
• B)the financing of a new chemical plant in Peru by a German company
• C)a low-interest loan from the U.S. government to Turkey to purchase military hardware
• D)a loan from the Japanese government to the Indonesian government to pay for electronic equipment

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Definitions:

Foreign Exchange Market

The global marketplace for exchanging national currencies against one another, driven by the need for currency conversion in trade and investment.

Depreciate

The process of allocating the cost of a tangible asset over its useful life, reflecting a decrease in its value over time.

US Dollars

The currency of the United States of America, widely used as a standard of exchange in international markets.

Forward Market

A market where individuals can engage in agreements to purchase or sell assets at a predetermined date and price in the future.