Direct Effects of FDI on Employment in the Host Country

question 68

Multiple Choice

Direct effects of FDI on employment in the host country arise when a foreign MNE

• A) brings in managers trained in the latest management techniques from the home country.
• B) creates jobs because of increased local spending by employees of the MNE.
• C) employs a number of host country citizens.
• D) causes local suppliers to hire more people.
• E) creates jobs in the supporting industries.

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Definitions:

Partial Hedge

A risk management strategy that does not fully offset the potential losses from an exposure, covering only a portion of the risk.

Equity Accounting

A method of accounting whereby an investor records its investment in an associate company at initial cost and subsequently adjusts the carrying amount for its share of the earnings and losses of the associate.