Negative Effects of FDI on Receiving Countries Include All of the Following

question 12

Multiple Choice

Negative effects of FDI on receiving countries include All of the following EXCEPT

• A) foreign firms can bankrupt local producers.
• B) foreign firms may not improve the receiving country's balance of payments.
• C) denationalization of local industries may occur.
• D) its demands for government benefits may cripple the economy of the receiving country.
• E) maximizing corporate profits will inevitable maximize the benefits to receiving countries.

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Definitions:

Nominal Wage Rate

The wage rate paid to employees expressed in current dollars, without adjustment for inflation or purchasing power.

Real Wage Rate

The purchasing power of wages, adjusted for inflation, indicating the actual goods and services that can be bought.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, like labor or capital.

Wage Rate

The amount of compensation paid per unit of time to an employee or worker for their services.