Throughout the 1990s, the Amount of Foreign Direct Investment Directed

question 28

Multiple Choice

Throughout the 1990s, the amount of foreign direct investment directed at both developed and developing nations increased dramatically. This trend reflects:

• A) a slowdown in global economic activity.
• B) the increasing share of the U.S. in the total FDI stock.
• C) the decline in cross-border flows of foreign direct investment.
• D) the increasing internationalization of business corporations.

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Definitions:

Trade

The action of buying, selling, or exchanging goods and services between people or entities.

Pareto Optimal Allocation

An allocation of resources in which it is impossible to make any individual better off without making at least one individual worse off, indicative of efficiency in resource distribution.

Utility Function

A mathematical representation in economics that defines how consumers rank different bundles of goods based on their levels of satisfaction.

Initial Endowment

The collection of resources, goods, or wealth that an agent starts with before entering into any transactions.