A country presently has a high level of unemployment because of weak economic conditions, and its income levels are very low. This country would most likely be an attractive target for direct foreign investment by MNCs as a result of the motive to:
A) enter markets where superior profits are possible.
B) react to trade restrictions.
C) diversify internationally.
D) use foreign factors of production.

Question

Quizplus · Accepted Answer

MNCs may find it attractive to invest in a country with high unemployment and low income levels in order to take advantage of the availability of cheap foreign factors of production, such as labor and resources. This can potentially lower production costs and increase profits for the MNC.

A Country Presently Has a High Level of Unemployment Because