Which of the Following Statements Is Most Likely to Be
Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host country?
A)It decreases the level of competition in the host country.
B)It tends to increase the prices of the products.
C)It leads to a high rate of unemployment in the long run.
D)When a foreign subsidiary imports a substantial number of its inputs from abroad,it results in a debit on the current account of the host country's balance of payments.
E)When a foreign subsidiary sends its profits to its home country,it results in the depletion of gold reserves of the host country.
The most important concerns regarding the costs of FDI for the home country center on the
A)balance-of-payments and employment effects of outward FDI.
B)technology capture effect and the perceived loss of national sovereignty.
C)reverse-resource transfer effect and the exposure to foreign markets caused by FDI.
D)import of substantial input from abroad and being held to "economic ransom."
E)exposure to foreign markets and the decreased costs of production.
Offshore production refers to FDI undertaken
A)to focus on extractive industries,such as oil and gas.
B)to serve the home market.
C)in shipping industries.
D)to decrease the prices of products in the host countries.
E)to capture tax benefits in the host country.
Caputo Fine Chemicals,a U.S.company,invested in a manufacturing facility in Mexico.The production from the Mexican facility was entirely used to serve the company's U.S.customers.Caputo Fine Chemicals' activity is called