Asked by Chase Crandall on Jun 15, 2024
Verified
Foreign direct investment is vulnerable to criticism because:
A) It does not bring jobs and new technology to developing countries
B) It can result in job loss for workers in developing countries
C) It does not encourage development of infrastructure
D) It can be used to exploit workers and degrade the environment
Foreign Direct Investment
Capital allocated by a firm or person from one country into commercial interests within a different country, achieved by creating business entities or buying business resources.
Developing Countries
Nations with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.
Environment Degrade
The process by which the natural environment deteriorates due to human activity or natural events, leading to negative impacts on ecosystems and human health.
- Distinguish the positive aspects and negative criticisms associated with foreign direct investment and international investment.
Verified Answer
KM
Kirsten MaundJun 18, 2024
Final Answer :
D
Explanation :
Foreign direct investment can indeed be used by multinational corporations to take advantage of low labor and environmental standards in order to increase profits, which can lead to exploitation of workers and damage to the environment. It can also result in a dependence on foreign investment rather than promoting the development of domestic industries and infrastructure. However, it can bring jobs and new technology to developing countries, and has the potential to contribute to economic growth and development if done responsibly and with proper regulation.
Learning Objectives
- Distinguish the positive aspects and negative criticisms associated with foreign direct investment and international investment.