Paper 1 · foreign direct investment
A benefit to Zimbabwe of foreign direct investment by a multinational company is that it
Araises the level of tariffs charged on imported goods
Breduces the number of firms competing in the market
Ctransfers ownership of local land to the government
Dbrings in capital, technology and management skills
Explanation: Foreign direct investment brings money into the country that did not have to be raised locally, along with equipment, production methods and management experience that local staff learn from. It also creates jobs and adds to tax revenue and export earnings. Tariffs and land ownership are matters of government policy.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Specimen Paper (edition B), Q1