In Which of the Following Situations Would FDI Improve the Current

question 67

Multiple Choice

In which of the following situations would FDI improve the current account of the host country's balance of payments?

• A) If the foreign subsidiary imports a substantial number of its inputs from abroad
• B) If the FDI reduces existing employment opportunities
• C) If the FDI is a substitute for imports of goods or services
• D) If the FDI results in substitution of products produced domestically

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Definitions:

Gross Method

An accounting practice where purchase discounts are ignored unless taken, with full invoice amounts recorded in the accounts payable.

Invoice Price

The price of goods as listed on the invoice, typically before any discounts, taxes, or additional charges.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials, labor, and overhead.