Which of the following illustrates how foreign aid differs from foreign investment?(1 point)

Responses

Foreign aid involves the exchange of domestic capital for foreign land, capital, and labor.
Foreign aid involves the exchange of domestic capital for foreign land, capital, and labor.

Foreign aid provides the capital that developing countries need to increase economic output.
Foreign aid provides the capital that developing countries need to increase economic output.

Foreign aid involves the transfer of money to address economic, military, and humanitarian situations.
Foreign aid involves the transfer of money to address economic, military, and humanitarian situations.

Foreign aid involves the transfer of money from one country to another.

1 answer

The response that best illustrates how foreign aid differs from foreign investment is:

Foreign aid involves the transfer of money to address economic, military, and humanitarian situations.

This option highlights that foreign aid is often provided for specific purposes such as addressing crises or supporting development goals, rather than for the purpose of gaining return on investment, which is typical of foreign investment.