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A developing nation decides to make a law preventing foreigners from owning businesses or land. How will this policy affect economic growth

Sagot :

Parrain

Answer:

  • It will decrease economic growth, because flow of funds across the border is essential to maximizing investment.

Explanation:

Less companies will come into the country to invest because foreign companies want to be able to own businesses so that they will be able to make money from them. They will invest funds in opening these businesses and they would take some of it out as profit.

If they are unable to open these businesses, money will not flow into the country to open them and so there will be less funds needed to fund investment which drives economic growth so economic growth will be less.

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