When FDI Occurs, What Are the Long-Run Effects of FDI

Multiple Choice

When FDI occurs, what are the long-run effects of FDI on industry output in the recipient nation?

A) There is no change in either the output of the capital-intensive or the labor-intensive industry.
B) The labor-intensive industry expands; the capital-intensive industry contracts.
C) The capital-intensive industry expands; the labor-intensive industry contracts.
D) Both capital- and labor-intensive industries expand in the same proportion.