Home governments may use which of the following to limit the effects of outbound foreign direct investment?
A) Insurance
B) Differential tax rates
C) Low-interest loans
D) Infrastructure improvements

Question

Quizplus · Accepted Answer

Home governments may use differential tax rates to limit the effects of outbound foreign direct investment. By imposing higher taxes on outbound FDI, the government can discourage companies from investing too much abroad and instead encourage them to invest in the domestic economy. Insurance, low-interest loans, and infrastructure improvements are not effective tools for limiting the effects of outbound FDI.

Home Governments May Use Which of the Following to Limit