Question 1

Which of the following represents direct foreign investment?

a) parent companies sending equipment to subsidiaries

b) purchase of a tract of land

c) bonds and other financial assets

d) subsidiaries remitting funds to parent companies

Question 2

Direct foreign investment would typically be welcomed if:

a) the products to be produced are substitutes for other locally produced products.

b) people from the country of the company's headquarter are transferred to the foreign country to work at the subsidiary.

c) the products to be produced are going to be exported.

d) All of these are correct.

Question 3

The followings are cost-related motives of direct foreign investment, except for.

a) Low labor costs

b) Land can be purchased at a low price

c) Manufacturing plants can be built for a low price

d) All of the above are cost-related motives. ?