Things to do:WriteTrueifthestatementiscorrectandwriteFalseifthestatement is incorrect.1). The home country's balanceof payments benefitsfrom the inward flow offoreign earnings.2). FDIhome country's balancecanalso benefittheof payments if the foreignsubsidiary createsdemands for home countryexports of capitalequipment, intermediategoods, and the like.3).country outward FDI ariseBenefitstothehomefrom employment effects.With4).thebalanceofpayments, positiveemployment effects arisewhen the foreignsubsidiary creates demandsfor home countryexports.5).Benefitsarisewhenthehome-country MNE learnsvaluable skills from itsexposure to foreignmarketsthatcansubsequently be transferredback to the home country.6).Whenassessingthecostsand benefits of FDI tothe home country, keep inmind the lessons ofinternational trade theory.of7).Thebalancepaymentssuffers from the initialcapital outflow required tofinance the FDI.8). The current account of thebalance of paymentssuffers if the FDI is asubstitute for directexports.9).Thetermoffshoreproduction refers to FDIundertaken toservéthehome market.10).Homecountryconsumersbenefit if the price ofthe particular productfalls as a result of theFDI.

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Write True if the statement is correct and write False if the statement is incorrect. _1). The home country's balance of payments benefits from the inward flow of foreign earnings. _2). FDI can also benefit the home country's balance of payments if the foreign subsidiary creates demands for home country exports of capital equipment, intermediate goods, and the like. 3). Benefits country outward FDI arise to the home from employment effects.

Write True if the statement is correct and write False if the statement is incorrect. _1). The home country's balance of payments benefits from the inward flow of foreign earnings. _2). FDI can also benefit the home country's balance of payments if the foreign subsidiary creates demands for home country exports of capital equipment, intermediate goods, and the like. 3). Benefits country outward FDI arise to the home from employment effects.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Things to do:
Write
True
if
the
statement
is
correct
and
write
False
if
the
statement is incorrect.
1). The home country's balance
of payments benefits
from the inward flow of
foreign earnings.
2). FDI
home country's balance
can
also benefit
the
of payments if the foreign
subsidiary creates
demands for home country
exports of capital
equipment, intermediate
goods, and the like.
3).
country outward FDI arise
Benefits
to
the
home
from employment effects.
With
4).
the
balance
of
payments, positive
employment effects arise
when the foreign
subsidiary creates demands
for home country
exports.
5).
Benefits
arise
when
the
home-country MNE learns
valuable skills from its
exposure to foreign
markets
that
can
subsequently be transferred
back to the home country.
6).
When
assessing
the
costs
and benefits of FDI to
the home country, keep in
mind the lessons of
international trade theory.
of
7).
The
balance
payments
suffers from the initial
capital outflow required to
finance the FDI.
8). The current account of the
balance of payments
suffers if the FDI is a
substitute for direct
exports.
9).
The
term
offshore
production refers to FDI
undertaken to
servé
the
home market.
10).
Home
country
consumers
benefit if the price of
the particular product
falls as a result of the
FDI.

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