Question:
Which of the following is an example of direct foreign investment?
a. An increase in the demand for U.S. dollars by foreigners.
b. A decrease in the supply of U.S. dollars by Americans.
c. The purchase of American planes by a Mexican company.
d. The sale of financial service to a foreign investor by a U.S. bank.
e. A Chinese company buying a microprocessor factory in Korea.
Investment:
An economy grows when the number of investments made in it grows. This is because an economy grows when more goods/services can be produced. This means that more machines and human capital are needed as well.
Answer and Explanation:1
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The correct answer is e. A Chinese company buying a microprocessor factory in Korea.
Direct foreign investment occurs when a foreign entity runs the...
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