Foreign Direct Investment Is

question 89

Multiple Choice

Foreign direct investment is:

• A) investment that occurs when a firm runs part of its operation abroad or invests in another company abroad.
• B) investment that occurs when a firm runs its operation domestically, and sells its product abroad.
• C) when foreign companies buy physical capital from the United States.
• D) when foreign companies buy and operate physical capital within the United States.

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Definitions:

Active Macroeconomic Policy

Economic strategies implemented by the government or central bank to stabilize the economy by adjusting spending, taxes, and interest rates.

Expansionary Gap

A situation where the actual output in an economy is greater than the potential output due to high demand.

Nominal Wages

The amount of money an employee is paid before adjustments for inflation, reflecting the current value of money.

Real Wages

The purchasing power of wages, adjusted for inflation, showing how many goods and services can be bought with a unit of labor.