Indirect effects of FDI on employment in a host country arise when:
A) a foreign MNE employs a number of host-country citizens.
B) jobs are created because of increased local spending by employees of an MNE.
C) an MNE brings in managers from the home country for its operations in the host country.
D) an MNE recruits people from the host country for research and development.
E) an MNE sends it home country employees to host countries for training.

Question

Quizplus · Accepted Answer

Indirect effects of FDI on employment in a host country can arise when employees of an MNE spend their incomes in the local economy. This can lead to increased demand and job creation in sectors such as retail, hospitality, and services. This is known as the multiplier effect.

Indirect Effects of FDI on Employment in a Host Country