Economics (AS & A Level) · Oct / Nov 2022 · Paper 32 · Question 18
9708Relationship between countries at different levels of development
Which statement does not support the view that extraction of mineral resources by a foreign company will make it more difficult for a developing economy to achieve future economic growth?
- AExports of these mineral resources will result in an appreciation of the exchange rate.
- BReduced tax rates aimed at encouraging the foreign company to invest in the country will increase inflation.
- CThe foreign company will raise the skill levels of the local population through training schemes.
- DThe foreign company will send profits back to its own country.
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Correct answer: C. The foreign company will raise the skill levels of the local population through training schemes.
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