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Case Interview Prep

Category - Economics

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Governments provide Foreign Direct Investment (FDI) incentives to encourage the movement of capital into their countries. The following are examples of incentives EXCEPT:
  1. lowered income and corporate taxes
  2. special economic zones of trade
  3. land and expatriation subsidies
  4. higher and more restrictive tariffs
Explanation
Answer: D - Higher and more restrictive tariffs are not examples of FDI incentives.

Key Takeaway: Governments like to attract foreign investment to raise the GDP of their countries and become more competitive. FDI incentives to attract this capital include lowered income and corporate taxes. Some countries such as the United Arab Emirates also offer special economic zones of trade. Other incentives include land and expatriation subsidies as well as lower tariffs.
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