Foreign direct investment

Extract E (lines 15–17) states: ‘In recent years, some of the BRICS+ countries, including China and India, have been responsible for large foreign direct investment (FDI) inflows into the G7.’

With the help of a suitable diagram, explain how increased inward foreign direct investment (FDI) can affect a country’s level of employment.

Extract F (lines 19–20) states: ‘The slowing, or reversal, of globalisation could mean that the benefits of specialisation and foreign direct investment are lost.’ Using the data in the extracts and your knowledge of economics, discuss the view that a slowing, or reversal, of globalisation would be harmful to developing economies such as Vietnam.

Extract B (lines 1–3) states: ‘Ireland has dropped its low-tax policy of the past 18 years, which had helped to persuade some of the world’s biggest companies, including Google and Facebook, to site their European headquarters in Ireland.’

Using the data in the extracts and your knowledge of economics, assess the view that a rise in Ireland’s corporation tax rate is likely to have a damaging effect on its macroeconomic performance.

Explain how the data in Extract A (Figures 1 and 2) show that nations with high and stable economic growth attract rising foreign direct investment (FDI) inflows.

Extract B (lines 18–19) states: ‘FDI can have many benefits. It should create employment, boost long-run economic growth and increase exports.’

With the help of a suitable diagram, explain how a rise in inward foreign direct investment (FDI) may lead to increased exports.

Extract C (lines 13–14) states: ‘Some argue that African governments should be doing more to improve the living standards of their citizens, rather than relying on foreign firms.’

Using the data in the extracts and your knowledge of economics, assess the view that to improve the living standards of their citizens, African nations should pursue policies to attract foreign direct investment (FDI).

A country experiences a large net capital outflow. All other things being equal, the most likely consequence of this in the short run will be a decrease in