1. 22 Foreign Investment The ability of the UK to win investment has been a crucial source of growth over many years. Last year, the UK had 697 foreign-backed investment projects, which created more than 30,000 new jobs. The UK had the biggest foreign investment of any European country, followed by Germany and Spain.

Source: BBC News, 5 June 2013 Explain and draw a graph to illustrate the effect of foreign direct investment on an economy operating with a recessionary gap.