One advantage of foreign direct investment (FDI) is that local employees receive better training, which raises human capital and causes substantial gains in productivity. One disadvantage is that the extra income earned is remitted to the country where the FDI originated. How would these changes influence the aggregate demand and aggregate supply curves?
- Aaggregate demand curve shift left; aggregate supply curve shift left
- Baggregate demand curve shift right; aggregate supply curve shift left
- Caggregate demand curve shift left; aggregate supply curve shift right
- Daggregate demand curve shift right; aggregate supply curve shift right