Which of the following is an implication of investment from abroad?
A)Poor countries become poorer because profits go to the foreign owners.
B)Foreign investment increases the destination country's stock of capital; therefore, it promotes growth.
C)Foreign investment increases GDP but not GNP.
D)Foreign investment is unfair because only foreigners benefit from it.

Question

Quizplus · Accepted Answer

Foreign investment can bring in new capital and resources to a country, leading to economic growth and development. This is because foreign investors bring in not just money, but also new technology, skills, and expertise. However, it is important for the host country to ensure that the terms of investment are fair and equitable, and that the benefits are shared between local communities and foreign investors. Option A and D are incorrect as they present a negative view of foreign investment without recognizing its potential benefits. Option C is partially correct but incomplete, as foreign investment can increase both GDP and GNP depending on the type and nature of investment.

Which of the Following Is an Implication of Investment from Abroad