When a Firm Invests Directly in New Facilities to Produce

question 40

Multiple Choice

When a firm invests directly in new facilities to produce and/or market a product in a foreign country,_____________ occurs.

• A) reciprocal foreign investment
• B) cross-border international investment
• C) international capital investment
• D) international expansion
• E) foreign direct investment

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Definitions:

Trade

The exchange of goods, services, or resources between individuals, businesses, or countries.

Specialize

The process by which individuals or entities concentrate on producing a limited scope of goods or services to gain efficiency or quality improvements.

Productivity

A measure of the efficiency of production, often calculated as the ratio of outputs produced to inputs used in the production process.

Trade

The act of buying, selling, or exchanging commodities within domestic or international markets.