FDI occurs when a firm:Question 1Select one:a.Ships its products from one country to another.b.Invests directly in facilities to produce, market or develop a product in a foreign country.c.Grants permission to another company in a different country to use its brand name.d.Invests in the shares of another company operating in the same country.
Question
FDI occurs when a firm:Question 1Select one:a.Ships its products from one country to another.b.Invests directly in facilities to produce, market or develop a product in a foreign country.c.Grants permission to another company in a different country to use its brand name.d.Invests in the shares of another company operating in the same country.
Solution
The correct answer is:
b. Invests directly in facilities to produce, market or develop a product in a foreign country.
This is what Foreign Direct Investment (FDI) means. It is an investment made by a firm or individual in one country into business interests located in another country. This is often done by buying a company in the target country or by expanding operations of an existing business in that country.
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