Which term is used for the amount of capital FDI transferred by MNEs in a specific timeframe?

Which term is used for the amount of capital FDI transferred by MNEs in a specific timeframe?

• A. FDI ratio
• B. FDI capital account
• C. FDI flow
• D. FDI valuation

Answer: (C)

The term used for the amount of capital foreign direct investment (FDI) transferred by multinational enterprises (MNEs) in a specific timeframe is FDI flow. This concept refers to the movement of capital into a country for the purpose of establishing or expanding operations, which can include investments in physical facilities or the purchase of existing businesses. It is a critical measure of the investment activity in the global economy and is usually tracked over a given period, typically annually or quarterly. FDI flow captures the dynamic nature of investment as it reflects new investments being made, rather than the total stock or accumulation of past investments. Understanding FDI flow is essential for countries and policymakers as it indicates not only how attractive a country is for foreign investment but also the potential for job creation and economic growth stemming from such investments. In contrast, other terms mentioned do not accurately describe this specific concept. For example, the FDI ratio would typically refer to a comparative measure, such as FDI relative to GDP, rather than the raw capital transferred. The FDI capital account focuses more on a broader accounting category in balance of payments, while FDI valuation pertains to the worth or assessment of investment assets rather than the flow of funds. Thus, FDI flow is the correct term

The term used for the amount of capital foreign direct investment (FDI) transferred by multinational enterprises (MNEs) in a specific timeframe is FDI flow. This concept refers to the movement of capital into a country for the purpose of establishing or expanding operations, which can include investments in physical facilities or the purchase of existing businesses. It is a critical measure of the investment activity in the global economy and is usually tracked over a given period, typically annually or quarterly.

FDI flow captures the dynamic nature of investment as it reflects new investments being made, rather than the total stock or accumulation of past investments. Understanding FDI flow is essential for countries and policymakers as it indicates not only how attractive a country is for foreign investment but also the potential for job creation and economic growth stemming from such investments.

In contrast, other terms mentioned do not accurately describe this specific concept. For example, the FDI ratio would typically refer to a comparative measure, such as FDI relative to GDP, rather than the raw capital transferred. The FDI capital account focuses more on a broader accounting category in balance of payments, while FDI valuation pertains to the worth or assessment of investment assets rather than the flow of funds. Thus, FDI flow is the correct term