When a company brings capital and/or technology to a host country, the host country benefits from the: Select one: a. Bandwagon effect of FDI. b. Political effect of FDI. c. Resource-transfer effect of FDI. d. Balance-of-payments effect of FDI.
Question
When a company brings capital and/or technology to a host country, the host country benefits from the:
Select one:
a. Bandwagon effect of FDI.
b. Political effect of FDI.
c. Resource-transfer effect of FDI.
d. Balance-of-payments effect of FDI.
Solution
The correct answer is:
c. Resource-transfer effect of FDI.
This is because when a foreign company invests in a host country, it often brings with it new technologies, skills, and capital. This can lead to an increase in the host country's productivity and economic growth. This is known as the resource-transfer effect of Foreign Direct Investment (FDI).
Similar Questions
Which of these is not the advantage of MNCs to the host country?Select one:a.Increase in social activitiesb.increase in economic activitiesc.Utilization of natural resourced.R&D efforts enhanced.
Which of the following represents a common method for host countries to restrict inward FDI?Question 9Select one:a.Low interest ratesb.Ownership restraintsc.Subsidiesd.Tax incentives
In which way can the home country's balance of payments benefit from FDI made in a foreign country? Select one: a. From cash outflow during the initial investment to finance the FDI b. From the inward flow of foreign earnings c. If FDI is a substitute for direct exports d. From the outward flow of foreign earnings
Can all countries benefit from the technology spillover effect of foreign firms?
Which of the following is not a benefit of multinationals to a country or economy?ImportsJobsIncreased choiceInvestment
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.