How can FDI help a country achieve a current account surplus?
A) If the FDI is a substitute for exports of goods or services, the effect can be to improve the current account of the host country's balance of payments.
B) When the MNE uses a foreign subsidiary to import goods and services to other countries.
C) When the MNE uses a foreign subsidiary to export goods and services to other countries.
D) If the FDI is a substitute for imports of goods or services, the effect can be positive on the current account of the home-country's balance of payments.
E) When the MNE transfers monies to finance the FDI

Question

Quizplus · Accepted Answer

When an MNE uses a foreign subsidiary to export goods and services to other countries, it can increase the host country's exports, thereby improving its current account balance.

How Can FDI Help a Country Achieve a Current Account