Which of the Following Is a Negative Economic Effect of FDI

question 4

Multiple Choice

Which of the following is a negative economic effect of FDI?

• A) Governments protect politically powerful industries with characteristic control.
• B) MNCs in manufacturing are accused of exploiting factory workers.
• C) Although competition from a new foreign affiliate can stimulate local firms,the new entry can also overwhelm them.
• D) Multinational corporations are criticized for repatriating profits to host countries,so that local residents get limited benefit from their presence.

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Definitions:

Market Structures

The organizational and other characteristics of a market that significantly affect the nature of competition and pricing within that market.

Retained Earnings

The portion of net income that is kept by the company instead of being paid out as dividends to its shareholders.

Venture Capital

Financing provided by investors to startup companies and small businesses with strong growth potential.

Well-Established Firms

Well-Established Firms refers to companies that have been in the market for a long period, gaining significant market share, reputation, and customer base.