Which of the following is a negative economic effect of FDI?
A. Governments protect politically powerful industries with characteristic control.
B. MNCs in manufacturing are accused of exploiting factory workers.
C. Although competition from a new foreign affiliate can stimulate local firms, the new entry can also overwhelm them.
D. Multinational corporations are criticized for repatriating profits to host countries, so that local residents get limited benefit from their presence.
Answer: C. Although competition from a new foreign affiliate can stimulate local firms, the new entry can also overwhelm them.
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