Colonial America had little industry and so had mostly raw materials to export. At the same time, there were many opportunities to purchase capital goods and earn a high rate of return because there was little existing capital so that the marginal product of capital was relatively high. What does this suggest about net exports and net capital outflow in colonial America?
Net exports were negative because the value of exports was low, and the colonies imported capital goods. If net exports were negative, net capital outflow must also have been negative. Net capital outflow would have been negative because the colonies sold stocks, bonds, and other domestic assets to foreigners to buy capital goods.
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Wendy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Wendy sees 3 movies a week and buys 3 magazines
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Unemployment in 1939, after a decade of recession and depression, still exceeded 10 percent
Indicate whether the statement is true or false
Which of the following might explain the evidence of an endowment effect in behavioral economics?
A) government regulation B) knowledge and experience C) the federal tax code D) class envy
Foreign investment in developing countries is limited for all of the following reasons except:
A. domestic saving in developing countries is too limited. B. developing countries try to control the nature of foreign investment in order to obtain greater benefits from it. C. developing countries lack the infrastructure necessary to attract foreign investment. D. it is often viewed in developing countries as exploitive.