ECONOMICS (CBSE/UGC NET)

ECONOMICS

ECONOMIC GROWTH

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following policies can attract more foreign direct investment?(1) lowering government rent(2) offering tax exemption to foreign companies(3) lowering the minimum wage rate of domestic workers
A
(1) and (2) only
B
(1) and (3) only
C
(2) and (3) only
D
(1), (2) and (3)
Explanation: 

Detailed explanation-1: -Promotional techniques consist of : a) providing information to potential investors; b) creating an attractive image of the country as a place to invest; and c) providing services to prospective investors. However, promotion is only one of several tools available to countries eager to attract foreign investment.

Detailed explanation-2: -The implementation of measures such as PM Gati Shakti, single window clearance and GIS-mapped land bank are expected to push FDI inflows in 2022. The government is likely to introduce at least three policies as part of the Space Activity Bill in 2022.

Detailed explanation-3: -On determinants, the paper finds that market size, infrastructure quality, political/economic stability, and free trade zones are important for FDI, while results are mixed regarding the importance of fiscal incentives, the business/investment climate, labor costs, and openness. II.

Detailed explanation-4: -Detailed Solution. The correct answer is Option 4. It is an investment made by a firm or individual in one country into business interests located in another country. FDI is different from foreign portfolio investment where the foreign entity merely buys equity shares of a company.

There is 1 question to complete.