Chapter 19.3, Problem 4R

To determine

To Discuss: The difference between humanitarian aid and foreign investment.

Explanation of Solution

Below are some of the main differences between humanitarian aid and foreign investment:

• Under the foreign investment it mainly focuses on the development of the outer side of the economy, such as the growth of funds, increases in the circular flow of money, and thus increases in the financial stability of the country.
• Under humanitarian aid it mainly focuses on the inner structure of the country and structure growth in the economy.
• Under the foreign investment the measures have been taken to give a hike in the export system of defense and thus increases the hi-tech technology and technical factor to develop economic growth.
• Under humanitarian aid the main aim is to take care of humanity and human developments, increasing their skills and basic living structures.

Humanitarian Aid	Foreign Investment
Focuses on internal sector of economy	Focuses on overall development of economy
Main aim is towards humanity	Main aim towards financial growth.

Economics Concept Introduction

Introduction:

The term foreign investment refers to when one country resources are invested in a different country in order to increase the economic growth of a developing country, the foreign investment helps in increasing interest rates thus further helps in increasing monetary funds.

On the other hand, the term humanitarian aid mainly focuses on developing those people, who find difficult surviving the tough situations, thus situations can be of people stuck in floods, earthquake and many other disasters.