If firms from country A undertake $20 billion of FDI in firms from country B in year 1, and another $20 billion in year 2, then we can say that in each of those two years, B receives annual FDI outflows of $20 billion, and A generates annual FDI inflows of $20 billion.

Question

Quizplus · Accepted Answer

In this scenario, country A is making the investments, so it is generating FDI outflows of $20 billion annually, while country B is receiving the investments, so it experiences FDI inflows of $20 billion annually.

If Firms from Country a Undertake $20 Billion of FDI