Question

Which of the following events would lead to an increase in direct foreign investment? Check all...

Which of the following events would lead to an increase in direct foreign investment?

Check all that apply:

The economy is bound to grow quickly.

The country raises its corporate tax rates.

The local currency is expected to depreciate over the next few years.

The country decides to privatize some state-owned enterprises.

The government removes restrictions against DFI.

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Answer #1

Increase in direct foreign investment is when

1. The economy is growing quickly which lead to increase in the demand in various sectors

2. Government will remove restriction against FDI , which gives more flexibility in FDI

3. The Country decides to privatize some state-owned enterprises, will allow FDI Investor to invest in those companies

4. The Local currency is expected to depreciate will make the goods cheaper , which will increase the exports and thus increase the FDI

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