All of the Following Are True About Foreign Direct Investment

question 76

Multiple Choice

All of the following are true about foreign direct investment (FDI) and portfolio investment except

• A)increases in the flow of portfolio investments increase the likelihood of financial crisis.
• B)both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy.
• C)FDI is relatively illiquid compared to portfolio investment.
• D)portfolio investments have been on the decline in recent years (or decades).

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Definitions:

Organizational Setting

Organizational setting refers to the physical and social environment of a business or institution, including its culture, structure, and operational dynamics.

Common Purpose

A shared goal or objective that unites a group of people or an organization.

Ethnocentrism

The belief that one's own culture, nation, or ethnicity is superior to others, often leading to judgment of other cultures based on one's own cultural standards.

Territoriality

A behavioral pattern observed in both humans and animals, where an individual or group defines and defends a physical area against others.