foreign direct investment (FDI) flows

• What effect does a fall in currency have on Foreign Direct Investment (FDI)?

  A fall in currency may increase FDI because it becomes cheaper to invest.
• Why might a continuing fall in currency discourage investment?

  It indicates that an economy has serious economic difficulties.
• How does the perception of economic difficulties relate to FDI?

  Serious economic difficulties discourage investment.
• What is the relationship between currency depreciation and investor confidence?

  Currency depreciation can lead to decreased investor confidence if it indicates economic difficulties.
• What does a continuing fall in currency suggest about an economy?

  It suggests that the economy is facing serious economic difficulties.