When firms undertake FDI,
A)they become MNCs.
B)they reduce their tax rate since they can tell each country that they do business in that they paid their taxes in other countries.
C)the can exploit workers by paying them below-market wages in depreciating currencies.
D)all of the above

Question

Quizplus · Accepted Answer

Undertaking FDI (Foreign Direct Investment) involves a company investing in and controlling operations in foreign countries. This often leads to the company becoming a multinational corporation (MNC) with operations in multiple countries. Therefore, choice A is the best option. Choice B is incorrect because FDI does not necessarily reduce a company's tax rate and each country has its own tax laws and regulations. Choice C is incorrect because exploiting workers in this manner would be illegal and unethical, and most countries have labor laws in place to prevent such practices.

When Firms Undertake FDI