Chapter 20.2, Problem 3R

To determine

To Analyze: The main aim for Americans to accept the foreign investment.

Explanation of Solution

The aim for Americans to accept the foreign investment is as follows:

• They accept the foreign investment from other countries because this helps them to increase resources more efficiently and effectively and increases the developing countries, under this its country’s financial development which is an important factor that affects the both U.S. equity and debt markets.

• Under this it attracts the inflow of foreign direct investment that brooder the connection between two countries and thus strengthens the trading factors and financial structure and thus it increases more of the U.S. economy and domestic products.

• This mainly affects the foreign portfolio system, which helps in developing and increasing the tax rates by the local government of the U.S., the interest rates, the dividends for the shareholders and thus increases the local currency in the market and value of export and import rates and increases in new technology factors.

Economics Concept Introduction

Introduction:

The term foreign direct investment refers to the situation under which one particular country invests in another country's investment policy, in shares, bonds, and most capital. Foreign direct investment also occurs when one establishes its business or market outside the region or in a different country.