Final answer:
The flow of FDI refers to the total amount of Foreign Direct Investment made within a specific timeframe, typically annually, encompassing strategic and significant ownership stakes in foreign companies.
Step-by-step explanation:
The flow of Foreign Direct Investment (FDI) is the amount of FDI attempted over a period of time (usually one year). FDI involves a company from one country making a significant investment in a company in another country, typically resulting in at least a ten percent ownership stake. For example, when the Belgian company InBev bought the U.S. company Anheuser-Busch, InBev made a substantial investment in a foreign economy, had to exchange euros for U.S. dollars, and assumed some level of managerial responsibility. This type of investment is indicative of a long-term strategic business decision, compared to the quicker transactions associated with portfolio investments, which involve less than a ten percent stake and do not come with managerial obligations.