BUS 200 Module 6

What is Foreign Direct Investment (FDI)?

• Investment in local government bonds

• Purchase of assets to gain management control

• Short-term stock trading

• Foreign currency exchange

Which of the following is NOT a theory of FDI?

• Eclectic Theory

• Market Power

• Labor Cost Theory

• International Product Life Cycle

Portfolio investment refers to:

• Investment with management control

• Buying land and building facilities

• Investment without management control

• Merging with a foreign company

Greenfield investment means:

• Acquiring an existing firm

• Building new facilities from scratch

• Buying company stock

• Short-term bond purchase

One reason companies pursue mergers and acquisitions is:

• To avoid taxes

• To increase global competitiveness

• To lower interest rates

• To diversify in agriculture

The most common recipients of FDI are:

• Low-income countries

• Developed and developing countries

• Island nations only

• Countries with no regulations

Which country received the most FDI inflows in 2020?

• China

• United States

• Germany

• Mexico

A benefit of FDI for a host country is:

• Increased exports

• Less competition

• Lower wages

• Fewer jobs

What is a challenge of FDI for host countries?

• Technology transfer

• Higher taxes

• Economic inequality

• Trade surpluses

The theory of 'Creative Destruction' was proposed by:

• Christensen

• Schumpeter

• Porter

• Keynes