A Swiss watchmaker opens a factory in the United States.This is an example of Swiss
A)exports.
B)imports.
C)foreign portfolio investment.
D)foreign direct investment.

Question

Quizplus · Accepted Answer

A Swiss watchmaker opening a factory in the United States is an example of foreign direct investment (FDI). FDI refers to the ownership or control of assets in one country by a foreign company or individual. In this case, the Swiss watchmaker is establishing physical presence in the United States by setting up a factory, which involves significant investment and risk-taking. This is different from foreign portfolio investment (C), which involves investing in financial assets such as stocks and bonds, and imports (B), which involve bringing goods or services from a foreign country to the domestic market. Swiss exports (A) would refer to Swiss products and services being sold in foreign markets, rather than a Swiss company setting up operations in a foreign country.

A Swiss Watchmaker Opens a Factory in the United States