Small economies are sometimes less successful than large countries in attracting FDI by raising import restrictions.What is the most likely reason for this?
A)Large economies impose higher trade restrictions.
B)Transportation costs are generally higher in small economies.
C)People in small economies are more nationalistic in their purchases.
D)Small economies frequently lack sufficient markets for large-scale production.

Question

Quizplus · Accepted Answer

Small economies frequently lack sufficient markets for large-scale production. This means that they may have limited demand for the products produced by FDI, making it less attractive for foreign investors to choose to invest in these small economies. As a result, even if import restrictions are lifted, the lack of market size may still deter foreign investors.

Small Economies Are Sometimes Less Successful Than Large Countries in Attracting