Question

CuberTech, an American electronics company, set up its production facilities in Chuaga, an Asian country, because the workers in Chuaga work for about one-third the pay of American workers. This substantially lowered CuberTech's cost of production. This scenario is an example of _____.

Answer 1

Foreign direct investment.

Step-by-step explanation:

Foreign direct investment is when a firm invests directly in production or other facilities, over which it has effective control, in a foreing country.

Types of foreign direct investment:

-Manufacturing foreign direct investment requires the establishment of production facilities.

-Service foreign direct investment requires building services facilities or an investment foothold via capital contributions or building office facilities.