Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 31, Problem 3PA
To determine
The difference between foreign direct investment and foreign portfolio investment.
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Students have asked these similar questions
Which of the following would be U.S. foreign direct investment?
A.
A U.S. canning factory opens a plant in Ecuador.
B.
A Bolivian bank buys U.S. corporate bonds.
C.
A Polish company opens a shipbuilding plant in the United States.
D.
A U.S. bank buys Bolivian corporate bonds.
Hello, I keep getting this question wrong on my practice quiz but im not sure what im doing wrong.
Provide two ways in which the criteria for investing differ between Foreign Direct Investment and
Foreign Portfolio Investment?
Chapter 31 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- What is the difference between foreign direct investment and portfolio investment?arrow_forwardWhich is an example of foreign portfolio investment? a. Australian tourists going on a safari in Kenya. b. Indonesian merchants selling coffee beans to Japanese importers. c. US consumers increasing their demand for German automobiles. d. Brazilian banks using pesos to buy stock in Mexican corporations.arrow_forwardWhich of the following is an example of U.S. foreign portfolio investment? Select one: a.Erica, a U.S. resident, buys bonds issued by the Swiss government. b.Neither A nor B are examples of U.S. portfolio investment. C.A U.S. legal office opens a branch office in Holland. d.Both A and B are examples of U.S. portfolio investment.arrow_forward
- What are the trends regarding foreign direct investment (FDI) in the world economy?arrow_forwardWhat is Foreign Direct Investment (FDI) all about?arrow_forwardWhich scenario best demonstrates foreign direct investment? Salia started a Polish restaurant in her home country, the United States, after she took cooking lessons from a well-known chef in Poland. Super Blooms, a reputable vegetable plant company in Holland, exports tomato, pepper, and potato garden plants across the globe. Ups n Downs Inc., a Chinese firm, supplies roller coaster components in the United States. Domesticity, a U.S.-based office furniture company, has set up its own assembly plant in Japan to cater to the needs of the Asian market. Lux Linens, a fabric conglomerate in the United States, imports raw silk from China and Italy.arrow_forward
- Discuss how changes in local real interest rates and foreign interest rates impact the decision to carry out investment by (i) foreigners and (ii) locals.arrow_forwardWhich of the following are direct foreign investments? Explain your answer. i. A Chinese company pays $6.49 million for a stake in the Hilton. ii. A Russian businessman buys $44 billion on FOREX. iii. An American company buys another American company; stockholders in the bought-US company sell their shares on FOREX. iv. A Turkish company builds a factory in Ethiopia and manages the factory as a contractor to the Turkish government.arrow_forwardExplain briefly what international investment law does. Why is it important? Is it a good or bad thing?arrow_forward
- Explain the difference between foreign direct investment (FDI) and foreign portfolio investment (FPI)? Explain which one is more useful to accelerate economic growth of home country.arrow_forwardGovernment has resorted to external borrowing to fund government projects such as infrastructure and rural development. These resulted to promoting the market for foreign good. Is it better to expand or limit foreign borrowing for the development of technology in the country? Explainarrow_forwardIn a country, private savings equals 600, the government budget surplus equals 200, and the trade surplus equals 100. What is the level of private investment in this economy?arrow_forward
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