A major cause for the increase in foreign direct investment is derived demand.

Question

Quizplus · Accepted Answer

Derived demand refers to the demand for goods and services that is created as a result of the demand for another good or service. In the case of foreign direct investment, the demand for investment opportunities in a particular country is derived from the demand for goods and services that can be produced or delivered through that investment. Therefore, derived demand is a major cause for the increase in foreign direct investment.

A Major Cause for the Increase in Foreign Direct Investment