solution

true / false questions

1. By the early 1990s, the radical position toward FDI was in retreat due to the rise of capitalism in Eastern Europe

1. Historically, most FDI has been directed at the most developed nations of the world

1. One function of the foreign exchange market is to provide some insurance against the risks that arise from volatile changes in exchange rates, commonly referred to as foreign exchange risk. Although the foreign exchange market offers some insurance against foreign exchange risk, it cannot provide complete insurance.
2. Spot exchange rates and the 90-day forward rates are not the same.

1. When companies wish to convert currencies, they typically enter the foreign exchange market through their own banks.
2. Subsidies take the form of cash grants, but not low-interest loans or tax breaks
3. when the money supply in a country increases slower than output increases, that will lead to deflation
4. Forward exchange refers to the adverse consequences of unpredictable changes in exchange rates
5. Carry trade, a kind of speculation, takes advantage of the disparity between spot exchange rates and forward exchange rates
6. The globalization of the world economy is having a positive effect on the volume of FDI
7. What happens in the foreign exchange market does directly impact the sales, profits, and strategy of a multinational enterprise.
8. FDI has grown more rapidly than world trade and world output