Why are international investors who have invested in developing nations favoring foreign direct investment and portfolio investment over loans?
A. It is illegal for banks to make loans to foreign firms.
B. The process of making loans is usually more difficult for investors to do than foreign direct and portfolio investment.
C. Investors have an aversion to owning dead capital and want to make sure that the resources they own do not become dead capital.
D. The interest rate charged on the loans is usually lower than what can be earned in the U.S.
Answer: C
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For a perfectly competitive firm, the price of its good is equal to the firm's marginal revenue because
A) information about price changes is hard to come by for small sellers. B) price and marginal revenue are the same economic concepts. C) individual perfectly competitive firms cannot influence the market price by changing their output. D) the firm's total revenue cannot be changed by anything the firms can do. E) there are only a small number of firms in the market.
Purchasing power parity means that the expected exchange rate is such that the returns from investing in two nations are equal
Indicate whether the statement is true or false
In Spain, people are considered organ donors unless the explicitly indicate they do not want to be. In the United States, people are only considered organ donors if they explicitly indicate they wish to be. Behavioral economics would suggest that
A) everything else equal, the opt-in system of Spain would generate more organ donors as a percentage of the adult population. B) everything else equal, the opt-in system of the United States would generate more organ donors as a percentage of the adult population. C) everything else equal, the opt-out system of Spain would generate more organ donors as a percentage of the adult population. D) everything else equal, the opt-out system of the United States would generate more organ donors as a percentage of the adult population.
In an economy that is at full employment, an increase in money supply will result in inflation, unless
A. velocity decreases. B. tax reduction is proportional to increases in the money supply. C. real GDP falls. D. velocity increases.