Question

Dragon Autos Inc., an automobile company based in the country of Bear Island, made a capital investment of $300,000 to set up production units and distribution channels in the country of Westerland from where it plans to access the Westerland market. Such investments are best known as_________.

Answer 1

Answer:

Foreign direct investment

Explanation:

Foreign direct investment (FDI) refers to a situation where a firm from country A invests in business in country B. Generally speaking FDI takes place when a firm acquires at least 10% of a business in another country.

In this case Dragon Autos is a company that is based in Bear Island (country A) that is investing $300,000 in the country of Westerland (country B).

FDI amounts to $253.6 billion in the US economy.