Question

Carol wants to expand her recycled toy business abroad because demand for recycled products is much higher in Europe and Asia than in the United States. She locates three suppliers in Europe and three in​ Asia, and creates one factory in Germany and one in Singapore. She seeks ways to advance her machinery to meet the needs of her production as well as her​ eco-friendly business model. In what type of international business has Carol​ engaged?

Answer 1

Answer: Foreign Direct Investment

Explanation: A foreign direct investment, or FDI, is when a business or individual from one country makes an investment of operations in another country. This investment can come in the form of full blown business operations in a different country, and this is often done because there are more opportunities in other countries over and above the opportunities that exist domestically. This can be anything from more open markets, to a higher demand, to better and cheaper product resources.

Carol, who is based in USA, has started foreign direct investments in Singapore and Germany, because of the more advanced machinery and resources available to her in those countries.