Which of the following would be an example of direct foreign investment in DVCs?
A) a grant from the World Bank to build an irrigation project in Kenya
B) the ﬁnancing of a new chemical plant in Peru by a German company
C) a low-interest loan from the U.S. government to Turkey to purchase military hardware
D) a loan from the Japanese government to the Indonesian government to pay for electronic equipment

Question

Quizplus · Accepted Answer

Direct foreign investment refers to when a company invests in and operates a business in a foreign country. Option B describes a German company financing a new chemical plant in Peru, making it an example of direct foreign investment in a developing country (DVC). Options A, C, and D involve either grants or loans from governments or international organizations, but do not involve a company investing in and operating a business within a DVC.

Which of the Following Would Be an Example of Direct