Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and
A)overpopulation.
B)low saving and investment.
C)a low import/export ratio.
D)low government spending.

Question

Quizplus · Accepted Answer

Foreign direct investment is an important source of funding for developing countries, and its decline can lead to a decrease in investment and savings within the country. This can make it more difficult for developing countries to invest in infrastructure and other critical areas needed for economic growth, resulting in a vicious cycle of low growth. The other options, including overpopulation, import/export ratio, and government spending, may have an impact on economic growth, but they are not directly related to the decline in foreign direct investment.

Foreign Direct Investment Declined Worldwide During the Recession of 2007-2009