Answer:
There are several ways in which the adverse effects of the balance of payments for the home country due to FDI can be offset:
1. Export promotion: FDI can lead to an increase in exports from the host country, which can help to offset the balance of payments deficit.
2. Repatriation of profits: FDI can result in profits being repatriated back to the home country. These profits can be used to offset the balance of payments deficit.
3. Increased demand for home country goods and services: FDI can lead to an increased demand for goods and services from the home country, which can help to offset the balance of payments deficit.
4. Increased investment by foreign firms in the home country: FDI can lead to increased investment by foreign firms in the home country, which can help to offset the balance of payments deficit.
Overall, the impact of FDI on the balance of payments depends on the specific circumstances of each case, including the nature of the investment, the size of the investment, and the economic conditions of the home and host countries
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