Question

Differentiate between foreign trade and foreign investment.

Distinguish between foreign trade and foreign investment.

Answer 1

Sr. No.	Foreign Trade	Foreign investment
1.	It involves the exchange of goods and services between countries in the international market.	It refers to the inflow of capital into a country from individuals, companies, or governments of another country.
2.	Foreign trade consists of imports and exports.	Foreign investment consists of buying land, acquiring a stake in a company or acquiring a whole company.
3.	It results in competition between companies and lower prices for consumers.	It results in increased economic growth and improved living standards
4.	Foreign trade results in connecting the markets or integration of markets in different countries.	Foreign investment generates employment opportunities and improves a country’s Gross Domestic Product.