In which way can the source country's balance of payments benefit from FDI made in a foreign country?
A) from cash outflow during the initial investment to finance the FDI
B) if the purpose of the foreign investment is to serve the home market from a low-cost production location
C) from the inward flow of foreign earnings
D) if FDI is a substitute for direct exports

Question

Quizplus · Accepted Answer

FDI can benefit the home (source) country's balance of payments from the inward flow of foreign earnings.

In Which Way Can the Source Country's Balance of Payments