Help: A 14-year-old girl living in Victoria, BC, purchases a new GameCube game system at Toys "R" Us for

Question

A 14-year-old girl living in Victoria, BC, purchases a new GameCube game system at Toys "R" Us for $150. The game is manufactured by the Nintendo Co. in Tokyo. Toys "R" Us pays Nintendo $100 for the game system. The other $50 covers the cost of workers, rent, and profit for Toys "R" Us.

Nintendo exchanges the $100 at the First National Bank of Tokyo for 8,000 yen. The First National Bank of Tokyo loans the $100 to the Honda Motor Co., which uses it (and a lot of additional money) to expand its automobile manufacturing facility in Alliston, Ontario.

The expansion of the Honda plant in Alliston, Ontario, represents which of the following?

A. Japanese imports from Canada

B. Japanese foreign portfolio investment in Canada

C. Japanese exports to Canada

D. Japanese foreign direct investment in Canada

Answer 1

I don't know the answer to this, but it seems like:

E. indirect foreign investment in Canada.

So that could be close to B. or D.

The first part of the question is probably a red herring -- the $100 could have come from anywhere.  What is probably relevant is the expansion of Canadian facility by Japanese firm.

Answer 2

Honda is foreign company for Canada thus expanding production in Allison is foreign investment into Canada.

"D" is right answer.

Answer 3

B