Question

Suppose you are discussing global trade with a friend who insists a country would be better off by restricting trade and investment with other countries. Which of the following economic responses would be the most logical for your​ discussion?

A. I am not sure I agree. Countries that allow more globalization have experienced higher rates of economic growth and typically can utilize greater levels of foreign direct investment to increase economic growth.
B. I am in agreement with you. Global trade doesn't seem to matter to growth rates and counties have greater economic growth when their growth comes from domestic investment.
C. I am not sure I agree. Low income countries usually have high levels of foreign direct investment which means they will eventually experience high levels of economic growth.
D. I am in agreement with you. Most low income counties allow high levels of trade with other countries. They experience high levels of trade but do not experience high rates of economic growth.

Answer 1

Option A, I am not sure I agree. Countries that allow further globalization, have increased growth rates and usually can make use of higher foreign direct investment rates in order to increase economic growth

Explanation:

International trade gives a nation greater access to the domestic market to non-existent goods and production-based technology.

Foreign investment raises a country's foreign exchange savings, thus increasing the balance of payment.

Research has found that a rise in FDI in financially advanced countries leads to higher growth rates relative to those in financially underdeveloped countries.

The economic development effect of FDI is driven by atmospheric conditions like financial industry development and the educational level in a country .