Describe the difference between foreign direct investment and foreign portfolio investment.

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter20: The Global Economy
Section20.2: Direct Foreign Investment- Should We Be Worried?
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(a) Describe the difference between foreign direct investment and foreign portfolio investment.

(b) Discuss how changes in local real interest rates and foreign interest rates impact the decision to carry out investment by (i) foreigners and (ii) locals.

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