Foreign Direct Investment

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For a country to obtain the benefits of direct investment by foreign multinationals in its industries, unrestricted incentives to foreign multinationals and a high degree of support to local businesses are both necessary. While the government of Kokua is prepared to offer incentives to foreign multinationals, the population of the country would most likely demand that the national legislature place restrictions on these incentives by the next voting term.

The claims above, if true, most strongly support which of the following conclusions?

Review: Foreign Direct Investment


Explanation

Reading the question: we glance at the prompt but skip down and check out the question stem. The understated language "most strongly support" tips us off that we can answer this question by proving in stronger terms. We will determine which answer choice must be true, given the prompt.

Logical proof: Choice (A) need not be true - we just have grounds to know it must be true - so it's out. Choice (B) sounds false, because we know there is the problem with the unrestricted incentives. (C) is wrong: the prompt makes clear that there are two key things we need, not just one. (C) is out. (D) has some potential: it's at least pointing out that there are problems with getting the investment done. We're down to (D) and (E). One must be true, given the prompt; the other need not be true. In (E), "overwhelming" is a very strong term that decreases the quality of the answer. After all, we don't really need overwhelming popular support--only enough for the incentives to be unrestricted and for support to local businesses to be in place. So (E) is out. Meanwhile, the prompt states as a fact that if Kokua offers incentives, the people will make demands messing it up. According to the prompt, it hasn't already happened, but it's a fact that it's likely to happen. On those grounds, it must be true that failure is likely. The correct answer is (D).


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