FDI stands for:
Options
AForeign Direct Investment
BForeign Direct Income
CForeign Development Index
DForeign Department Investment
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International TradePYQ - Dec 2021 (Inter)Question 168 of 20
All Questions Correct Answer
✅ Option a — Foreign Direct Investment
All Options:
- AForeign Direct Investment
- BForeign Direct Income
- CForeign Development Index
- DForeign Department Investment
Detailed Solution & Explanation
To determine the correct answer, let's break it down step by step:
• The term FDI is commonly used in the context of international trade and investment, which is a key concept in business economics.
• In business economics, FDI refers to an investment made by a company or individual in a foreign country, with the intention of establishing a lasting interest in that country's business.
• The correct term for this concept is Foreign Direct Investment, which involves the transfer of resources such as capital, technology, and management expertise from one country to another.
• This concept is important in business economics as it helps to promote economic growth, create jobs, and increase trade between countries.
• Options like Foreign Direct Income and Foreign Department Investment are incorrect because they do not accurately reflect the concept of investing in a foreign country's business, and Foreign Development Index is not a recognized term in the context of international trade and investment.
• Therefore, the correct answer is the one that accurately reflects the concept of investing in a foreign country's business, which is a fundamental principle in business economics.
About This Chapter: International Trade
Paper
Paper 4: Business Economics
Weightage
10%
Key Topics
Theories, Trade Policy, Exchange Rates
This chapter explores trade between nations — why countries trade, the theories of Absolute and Comparative Advantage, Balance of Payments, Exchange Rate systems (Fixed vs Flexible), and India's trade policy including tariffs, quotas, and WTO rules.
View Official ICAI SyllabusExam Strategy Tip
Understand Comparative Advantage theory thoroughly — it's the foundation of international trade. Also focus on the Balance of Payments structure and what causes deficits.
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