What is the primary purpose of Foreign Direct Investment (FDI) in developing countries?

To generate short-term financial gains.

To acquire foreign financial assets.

To bring in capital, technology, and skills.

To promote exports of the investing country.

Which of the following is NOT a characteristic of Foreign Portfolio Investment (FPI)?

Active management by the investor.

Investment in easily tradable financial assets.

Seeking to gain control over managerial operations.

Focus on short-term financial gains.

What does the automatic route in Foreign Direct Investment (FDI) imply?

No need for any approval from government agencies.

Investment in sectors with stringent regulations.

Seeking prior approval from the Reserve Bank.

Exclusively for investments in the defense sector.

How does Foreign Direct Investment (FDI) promote economic growth in host countries?

By focusing on short-term financial gains.

By causing balance of payments deficits.

By bringing in technology, management, and marketing skills.

By reducing employment opportunities.

What is the primary motivation for foreign companies to invest in countries with strong economic growth?

To gain control over managerial operations.

To generate quick returns through FDI.

To promote exports of their home country.

To benefit from the skilled workforce.

How does Foreign Portfolio Investment (FPI) differ from Foreign Direct Investment (FDI)?

FPI involves active management by the investor.

FPI seeks to bring in technology and skills.

FPI typically leads to control over managerial operations.

FPI focuses on long-term investments.

What is the primary purpose of Foreign Portfolio Investment (FPI)?

To bring in capital and technology.

To promote economic growth in host countries.

To generate short-term financial gains.

How does Foreign Portfolio Investment (FPI) impact a country's economy during times of high withdrawals?

It leads to increased economic stability.

It often indicates foreign investors seeking higher returns elsewhere.

It results in long-term investments.

It has no impact on the economy.

Which body or agency is responsible for approving Foreign Direct Investment (FDI) proposals in India involving a significant amount?

Department of Economic Affairs (DEA).

Cabinet Committee on Economic Affairs (CCEA).

Foreign Investment Promotion Board (FIPB).

Foreign Direct Investment Concept - 2 Free MCQ Practice Test with Solutions

	Interdisciplinary Issues in Indian Commerce 49 videos\|45 docs\|14 tests

	Interdisciplinary Issues in Indian Commerce 49 videos\|45 docs\|14 tests

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