Which of the Following Is an Example of Foreign Direct

question 36

Multiple Choice

Which of the following is an example of foreign direct investment in China?

• A)U.S.auto entrepreneur Elon Musk buys stock in Alibaba Group Holding Limited of Hangzhou,China.
• B)Chinese Shenzen Airlines company buys a small U.S.midwest airline company,Air Chicago.
• C)The U.S.company Walmart buys a warehouse in Shanghai.
• D)The bank of China purchases U.S.Treasury bonds.
• E)A U.S.foreign exchange speculator buys $200,000 worth of the Chinese currency the yuan.

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Definitions:

Demand Increase

This occurs when there is a rise in the quantity of a product or service that consumers are willing and able to purchase at a given price, often due to factors like increased income, changes in tastes, or population growth.

Supply Decrease

A supply decrease refers to a situation where the quantity of a good or service that producers are willing and able to sell at a given price level falls, often due to factors like increased production costs or regulatory changes.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where market supply and demand balance each other.

Supply Decrease

A situation in economics where the amount of a certain good or service that producers are willing to provide at a specific price level reduces.