In the short-run (specific-factors) model, foreign direct investment is expected to cause a(n) ________in the production of the capital-intensive good and a(n) ________in the production of the land-intensive good in the receiving country.


A. decrease; decrease
B. increase; decrease
C. decrease; increase
D. increase; increase

Respuesta :

Answer:

The correct answer is b. increase; decrease.

Explanation:

Foreign Direct Investment (FDI) is that made by natural or legal persons not resident in the country where the investment is made, which can be done by buying shares or participations of a company established or constituted in the country with the aim of permanence .

FDI can also occur through contracts that generate collaboration, concession or services between the investor and the company, as well as through the acquisition of real estate in the country of destination of the investment.

These contributions can be made directly in currencies that are subsequently converted into local currency, or in kind, through the non-refundable import of tangible goods such as machinery and equipment, or intangibles, such as technology and patents.

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