A home country encourages outflows of foreign direct investment because it ________.
A) helps in replacing jobs at home
B) sends resources out of the home country
C) tends to increase the long-term competitiveness of firms
D) takes the place of all the exports and imports in the country

Question

Quizplus · Accepted Answer

Encouraging outflows of foreign direct investment tends to increase the long-term competitiveness of firms as it allows for expansion and access to new markets. It also often results in the transfer of technology and knowledge from the home country to the host country, which can have positive spillover effects. Choices A, B, and D are incorrect as they do not reflect the positive benefits for the home country.

A Home Country Encourages Outflows of Foreign Direct Investment Because