Low wages and low-cost land in developing countries will not attract foreign investment in manufacturing facilities if the developing countries
A. lack well-developed infrastructure.
B. permit unrestricted repatriation of profits.
C. protect their central banks from political control.
D. all of the options are correct.
Answer: A
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When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $400 billion
When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $800 billion. A) 2.0; 4.0 B) 0.4; 0.2 C) 0.2; 0.4 D) 4.0; 8.0 E) $400 billion; $800 billion
________ in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to appreciate, everything else held constant
A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease
Why is there a deadweight loss associated with subsidy payments?
A) There is no deadweight loss from a subsidy. B) Quantity supplied is less than the equilibrium amount, so consumers and producers lose surplus value on those units that are no longer produced. C) Quantity supplied exceeds the equilibrium amount, and consumer willingness to pay for these additional units is smaller than the marginal cost of producing them. D) The subsidy payment does not distort quantities in the market, but the government cost exceeds consumer willingness to pay for the quantity demanded.
Both screening and signaling:
A. correct inefficiency in the market. B. allow more transactions to take place that are valuable to buyers and sellers. C. can increase surplus gained in a market. D. All of these statements are true.