AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Foreign investment is the money spent by MNCs to buy assets (land, buildings, machines) in another country to set up production there. Selling goods abroad is simply export of products, while foreign investment involves actually establishing production units in the foreign country.
Source: Interlinking Production Across Countries, Chapter 4
The examiner expects two parts: define foreign investment (linked to MNCs buying assets/setting up factories) and distinguish it from foreign trade/selling abroad. The key distinction is production (investment) vs. trade (selling). Quote the textbook definition — "money spent to buy assets such as land, building, machines" — for full marks.