Developing countries do:
A)not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place.
B)not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs.
C)compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
D)compete with one another for foreign investment, and this competition reduces the benefits from foreign investment.

Question

Quizplus · Accepted Answer

Developing countries often compete with each other for foreign investment, which can lead to a "race to the bottom" where they offer excessive incentives to attract investors, potentially reducing the net benefits of such investments.

Developing Countries Do