Chapter 20, Problem 4AA

To determine

To Fill: The correct term in the given blank

Answer to Problem 4AA

Despite

Explanation of Solution

Foreign direct investment helps the developing or under developing country to increase its circular flow of money in the economy, thus it also helps in increasing the funds, increase in the interest rates and banks rates and thus also increases the new technology in the country.

The investment in the developing country helps in a hike in the process of exports and imports. As exports increase the demand for a product increases and if the imports increases thus it helps in the inflow of new market from another country and thus increases monetary funds.