An Italian company builds and operates a pasta factory in the United States.This is an example of Italian
A)foreign direct investment that increases Italian net capital outflow.
B)foreign direct investment that decreases Italian net capital outflow.
C)foreign portfolio investment that increases Italian net capital outflow.
D)foreign portfolio investment that decreases Italian net capital outflow.

Question

Quizplus · Accepted Answer

Foreign direct investment (FDI) occurs when a company from one country makes a physical investment in building a factory in another country. This increases the investing country's net capital outflow as it involves capital moving out of the country to establish the factory abroad.

An Italian Company Builds and Operates a Pasta Factory in the United