If the FDI Is a Substitute for Imports of Goods

question 86

True/False

If the FDI is a substitute for imports of goods or services, the effect can be to improve the current account of the host country's balance of payments.

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Definitions:

Bootstrapping

A method of starting a company using personal finance or operating revenues with minimal outside investment, emphasizing cost-efficiency and lean operations.

Consumer Trends

Patterns or tendencies in consumer behavior that indicate how the choices and preferences of consumers change over time in relation to various factors like market conditions, technological advancements, and cultural shifts.

Product Diversification

This refers to the strategy employed by businesses to increase the variety of products or services they offer to expand into new markets.

Business Plan

A formal written document that outlines a company's objectives, strategies, market analysis, financial forecasts, and management plan.