Question

The Canadian government decides to offer tax concessions to foreign companies that agree to build a manufacturing facility in Canada. This tax concession is a way to

a. encourage inward FDI.
b. discourage inward FDI.
c. encourage outward FDI.
d. discourage outward MNE.
e. discourage inward MNE.

Answer 1

Answer: a. encourage inward FDI.

Step-by-step explanation:

Foreign Direct Investment (FDI) refers to a situation where a foreign company invests in a country by establishing or buying a business and then maintaining direct control over it.

The Canadian Governments is offering tax concessions ( reduced taxes) to foreign companies for them to establish facilities in Canada which means that they are encouraging the inflow of FDI into the country at the promise of less taxes.