Final answer:
Direct effects of FDI on employment in the host country are primarily observed when foreign MNEs employ host country citizens, which leads to job creation and other positive economic impacts like infrastructure development and skill dissemination. The broader context of international trade and FDI encapsulates a complex set of pros and cons that influence jobs and economies globally. d) Causes local suppliers to hire more people.
Step-by-step explanation:
Direct effects of FDI on employment in the host country arise when a foreign MNE employs a number of host country citizens. This is a focal point of the interaction between multinational enterprises (MNEs) and the local economies they engage with. The presence of MNEs can lead to various positive outcomes, such as the creation of well-paying jobs, investment in local infrastructure like roads and power lines, and technological spillovers that can benefit local industries.
MNEs, through their operation in host countries, can also contribute to the economy by generating revenue for the local community and even encourage host governments to implement human rights and environmental protections. Another direct effect is when MNEs reinvest in local economies, such as building schools or hospitals, which can have substantial socioeconomic impacts.
Globalization and international trade can lead to job displacement in developed countries; however, they also create new opportunities for employment and economic activity both in host countries where outsourcing occurs and within the MNEs themselves. It is essential to consider both the advantages and drawbacks of international trade and foreign direct investment when evaluating their impact on jobs, wages, and working conditions.