When a firm exports its products to a foreign country, foreign direct

QUESTION

When a firm exports its products to a foreign country, foreign direct investment occurs.

Indicate whether the statement is true or false.

ANSWER

FALSE
Foreign direct investment (FDI) occurs when a firm invests directly in facilities to produce or market a product in a foreign country. According to the U.S. Department of Commerce, FDI occurs whenever a U.S. citizen, organization, or affiliated group takes an interest of 10 percent or more in a foreign business entity.