The US Commerce Department Defines Foreign Direct Investment as Occurring When

question 17

Multiple Choice

The U.S. Commerce Department defines foreign direct investment as occurring when:

• A) a U.S. company acquires at least 51% ownership of a foreign company or a foreign company acquires at least 51% ownership of a U.S. company.
• B) a U.S. foreign company acquires an American company with 10 or more workers or a foreign company acquires a foreign company with 10 or more workers.
• C) a U.S. company acquires at least 10% ownership of a foreign company or a foreign company acquires at least 10% ownership of a U.S. company.
• D) there is only investment by foreign governments in American companies.

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Definitions:

Aggregate Expenditure

Aggregate expenditure is the total amount of spending in an economy, including consumer spending, investment, government spending, and net exports.

Equilibrium Real GDP

The level of gross domestic product where aggregate supply equals aggregate demand at current prices, adjusted for inflation.

Marginal Propensity

Refers to the ratio of the change in an individual's consumption to the change in their income.

Disposable Income

Money available to households for personal spending and saving after deducting their income taxes.