Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host country?
A)It decreases the level of competition in the host country.
B)It tends to increase the prices of the products.
C)It leads to a high rate of unemployment in the long run.
D)When a foreign subsidiary imports a substantial number of its inputs from abroad,it results in a debit on the current account of the host country's balance of payments.
E)When a foreign subsidiary sends its profits to its home country,it results in the depletion of gold reserves of the host country.

Question

Quizplus · Accepted Answer

When a foreign subsidiary imports a substantial number of its inputs from abroad, it results in a debit on the current account of the host country's balance of payments. This can lead to a negative impact on the host country's economy. The other options are less likely to be true or are not supported by evidence.

Which of the Following Statements Is Most Likely to Be