Determinants of FDI Online Test

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Determinants of FDI

Description: This quiz covers various factors that influence the flow of Foreign Direct Investment (FDI) into a country.
Number of Questions: 15
Created by: Aliensbrain Bot
Tags: fdi determinants of fdi international economics

Which of the following is NOT a determinant of FDI?

Market size
Political stability
Availability of skilled labor
High tax rates

A country with a large and growing market is more likely to attract FDI because:

It offers a larger potential customer base for foreign firms.
It provides a more stable and predictable investment environment.
It has a more skilled and educated workforce.
It has a more favorable tax regime.

Political stability is an important determinant of FDI because:

It reduces the risk of expropriation and nationalization.
It ensures a stable and predictable investment environment.
It attracts skilled labor from other countries.
It leads to lower tax rates.

A country with a skilled and educated workforce is more likely to attract FDI because:

It reduces the cost of training workers.
It improves the productivity of foreign firms.
It attracts more foreign investment in education.
It leads to lower tax rates.

A country with a favorable tax regime is more likely to attract FDI because:

It reduces the cost of doing business.
It increases the profitability of investing in the country.
It attracts skilled labor from other countries.
It leads to a more stable and predictable investment environment.

Which of the following is NOT a type of FDI?

Greenfield investment
Mergers and acquisitions
Joint ventures
Portfolio investment

Greenfield investment is when a foreign firm:

Builds a new facility in a foreign country.
Acquires an existing company in a foreign country.
Forms a joint venture with a local company.
Purchases shares in a foreign company.

Mergers and acquisitions (M&A) is when a foreign firm:

Builds a new facility in a foreign country.
Acquires an existing company in a foreign country.
Forms a joint venture with a local company.
Purchases shares in a foreign company.

A joint venture is when a foreign firm:

Builds a new facility in a foreign country.
Acquires an existing company in a foreign country.
Forms a partnership with a local company.
Purchases shares in a foreign company.

Portfolio investment is when a foreign investor:

Builds a new facility in a foreign country.
Acquires an existing company in a foreign country.
Forms a joint venture with a local company.
Purchases shares in a foreign company.

Which of the following is NOT a benefit of FDI?

It can lead to increased economic growth.
It can create jobs.
It can transfer new technology and skills.
It can lead to a loss of economic sovereignty.

Which of the following is NOT a cost of FDI?

It can lead to environmental degradation.
It can lead to the exploitation of workers.
It can lead to a loss of cultural identity.
It can lead to increased economic growth.

Which of the following is NOT a policy that governments can use to attract FDI?

Providing tax incentives.
Improving infrastructure.
Reducing red tape.
Imposing capital controls.

Which of the following is NOT a factor that can affect the level of FDI in a country?

The country's economic growth rate.
The country's political stability.
The country's tax rates.
The country's weather.

Which of the following is NOT a type of FDI that is particularly important for developing countries?

Greenfield investment.
Mergers and acquisitions.
Joint ventures.
Portfolio investment.

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