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If a U.S.-based MNC makes an acquisition of a small firm in Indonesia, which of the following best describes the transaction, from a balance of
If a U.S.-based MNC makes an acquisition of a small firm in Indonesia, which of the following best describes the transaction, from a balance of payments point of view? O That is direct foreign investment. There is no cash effect on the United States until the products of that company are imported into the U.S. Those imports will represent a cash outflow from the United States. O That is a portfolio investment, which represents a cash outflow from the United States O That is direct foreign investment (DFI), which represents a cash outflow from the United States. O That is a purchase of physical assets, so the cash inflows to the United States and the cash outflows from the United States cancel out. There is no net effect on the balance of payments. O That is direct foreign investment (DFI), which represents a cash inflow to the United States
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