Direct foreign investment is considered an attractive investment because
a. it is usually focused on infrastructure
b. it initiates projects that are later taken over by domestic entrepreneurs
c. it only employs foreign workers so it doesn't interfere with domestic development planning
d. it typically involves bringing into the LDCs new expertise
e. it replaces domestic investment
D
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If there is an increase in foreign financial investment in the United States as the result of large U.S. budget deficits and attractive interest yields,
a. fiscal policy will be more expansionary since there will be no crowding-out effect. b. fiscal policy will be more expansionary since U.S. residents will increase their savings, so they can repay the foreigners in the future. c. foreign exchange value of the dollar will depreciate, which will lead to an increase in net exports and aggregate demand. d. foreign exchange value of the dollar will appreciate, which will lead to a decrease in net exports and aggregate demand.
In Figure 12.6, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is 130 passengers per day, which is more profitable, entry deterrence or the passive duopoly outcome?
A. The entry deterrence outcome B. The passive duopoly outcome C. Fly Smart would earn the same profit. D. There is insufficient information.
The more society consumes today
A. the less society can consume in the future. B. the more it consumes next year. C. the more capital goods society can produce in the future. D. the less it can produce today.
Refer to the scenario above. What is the present value of Option B?
A) $2,463.66 B) $3,267.99 C) $4,157.46 D) $5,800.79