please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly 16. Which of the following best describes the concept of foreign direct investment (FDI)? A) Investment made by acompany or individual in one country in business interests in another country B) Investment made by the government indomestic industries to promote economic growth C) Investment made by individuals in financial markets within theirown country D) Investment made by foreign governments in domestic industries to promote economic development

Foreign direct investment (FDI) refers to option A, which is an investment made by a company or…

Answered: 16. Which of the following best…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 3PA

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16. Which of the following best describes the concept of foreign direct investment (FDI)? A) Investment made by a company or individual in one country in business interests in another country B) Investment made by the government in domestic industries to promote economic growth C) Investment made by individuals in financial markets within their own country D) Investment made by foreign governments in domestic industries to promote economic development
Which of the following statements are correct? state which ones are definitely incorrect and why. a. Capital grows when investment is higher than depreciation b. The growth rate of capital increases when investment is higher than depreciation c. For a given rate of depreciation of capital, a rise in the ratio of investment to capital will raise the growth rate of capital d. There are no rich countries wth low investment ratios, and no poor countries with high investment ratios e. A country can only invest more than it saves if it borrows from abroad. f. The scatter diagram of capital output ratios vs investment rates does not show a perfect correlation. Therefore there is something wrong with the model of the way capital grows g. A country that increases its saving rate will be able to have more rapid growth of capital for as long as it maintains this higher savig rate h. A country that increases its saving rate will be able to have more rapid…
Question 1Some data at first might seem puzzling: The share of GDP devoted to investment was similar for Country liberty and Country Techno from 1970 - 2001. However, during these same years Country Techno had a 6 percent growth rate of average annual income per person, while Country liberty had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?
Explain the difference between foreign direct investment (FDI) and foreign portfolio investment (FPI)? Explain which one is more useful to accelerate economic growth of home country.
What do loanable funds finance? What is the source of loanable funds? Loanable funds finance _______. A. business investment, the government budget surplus, and international borrowing B. business investment, the government budget deficit, and international investment or lending C. private saving, the government budget surplus, and international borrowing D. private saving, the government budget deficit, and international investment or lending
4. Assume no government and no international trade in a country. Show that measured savings is identical to measured investment.
In general, foreign entities: a. are borrowers of domestic (U.S.) loanable funds. b. require a greater inflation premium than domestic borrowers. c. are not concerned about the U.S. interest rate compared to their own, since it is illegal for them to lend in the United States. d. are lenders in the domestic (U.S.) loanable funds. e. require a smaller inflation premium than domes tic borrowers.
Discuss the role of budget surpluses and trade surpluses in national saving and investment
(b) Discuss how changes in local real interest rates and foreign interest rates impact the decision to carry out investment by (i) foreigners and (ii) locals.
Government has resorted to external borrowing to fund government projects such as infrastructure and rural development. These resulted to promoting the market for foreign good. Is it better to expand or limit foreign borrowing for the development of technology in the country? Explain
Give an examples and non-examaples of foreign direct investment
10. In Mankiw's model of a small open economy, domestio interest rates are set by the world's market for loanable funds, rather than by domestic saving and investment. a. What are the two simplifying assumptions in the model that disconnect domestic interest rates from domestic saving and investment? b. What is determined by domestic saving and investment in the model?

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