Foreign Direct Investment (FDI) AP Human Geography Quiz: Test Your Knowledge

📚 Quick Study Guide

• 🌍 Definition: Foreign Direct Investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
• 📈 Types of FDI:
  • 🟢 Horizontal FDI: Investing in the same industry abroad as a company operates domestically.
  • ⚡ Vertical FDI: Investing in a different stage of the supply chain.
  • 🤝 Conglomerate FDI: Investing in unrelated industries.
• 🎯 Motivations for FDI:
  • 💸 Market-seeking: Entering new markets to increase revenue.
  • ⚙️ Resource-seeking: Accessing raw materials or low-cost labor.
  • 💡 Efficiency-seeking: Optimizing production processes.
• влия́ние Impacts of FDI:
  • ➕ Positive: Economic growth, job creation, technology transfer.
  • ➖ Negative: Exploitation of resources, environmental degradation, increased inequality.
• 🗺️ Factors Influencing FDI:
  • 🏛️ Political stability
  • ⚖️ Regulatory environment
  • 💰 Economic conditions
  • 🧱 Infrastructure

🧪 Practice Quiz

1. What is Foreign Direct Investment (FDI)?
1. A. Investment in domestic markets only.
2. B. Investment made by a government in its own country.
3. C. Investment made by a firm or individual in one country into business interests located in another country.
4. D. Investment solely in the stock market.
2. Which type of FDI involves investing in the same industry abroad as a company operates domestically?
1. A. Vertical FDI
2. B. Horizontal FDI
3. C. Conglomerate FDI
4. D. Portfolio Investment
3. What is a primary motivation for market-seeking FDI?
1. A. To access lower labor costs.
2. B. To enter new markets and increase revenue.
3. C. To access raw materials.
4. D. To avoid domestic taxes.
4. Which of the following is a potential negative impact of FDI?
1. A. Economic growth
2. B. Job creation
3. C. Technology transfer
4. D. Environmental degradation
5. Which factor significantly influences FDI decisions?
1. A. The color of the national flag.
2. B. Political stability.
3. C. The number of rainy days.
4. D. The popularity of local sports teams.
6. What is Vertical FDI?
1. A. Investing in the same industry.
2. B. Investing in a different stage of the supply chain.
3. C. Investing in unrelated industries.
4. D. Investing only in real estate.
7. Efficiency-seeking FDI is primarily motivated by:
1. A. Gaining access to new markets.
2. B. Optimizing production processes.
3. C. Accessing raw materials.
4. D. Avoiding trade barriers.