Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 7, Problem 5PA
Subpart (a):
To determine
Foreign investment and its effects.
Subpart (b):
To determine
Foreign investment and its effects.
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Chapter 7 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
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Similar questions
- Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?arrow_forwardWhich of the following statements is the most correct? a. The regulation of foreign investment is outside the responsibility of the WTO, and a separate multilateral treaty is in place to regulate and protect the rights of foreign investors and their investments b. Regional economic integration is unlikely to be a vehicle for multilateralising the legal protection of foreign investment c. Bilateral investment treaties do not cover matters related to the protection of the environment d. Once admitted to invest in the territory of a host State, investors must comply with local laws and regulations e. It is typical that a bilateral investment treaty would include provision for disputes between investors and the host State to be submitted to the host State's domestic courts.arrow_forwardWhich of the following are direct foreign investments? Explain your answer. i. A Chinese company pays $6.49 million for a stake in the Hilton. ii. A Russian businessman buys $44 billion on FOREX. iii. An American company buys another American company; stockholders in the bought-US company sell their shares on FOREX. iv. A Turkish company builds a factory in Ethiopia and manages the factory as a contractor to the Turkish government.arrow_forward
- Why do businesses pursue international expansion beyond their domestic markets?arrow_forwardWhat effect will a change in the price of oil have on the foreign exchange market of a developing country like South Africa where oil is imported? Include a diagram in your answerarrow_forwardINTERNATIONAL TRADE Which of the following are direct foreign investments? Explain your answer. i. A Chinese company pays $6.49 million for a stake in the Hilton. ii. A Russian businessman buys $44 billion on FOREX.arrow_forward
- Let’s assume that some foreign countries start to subsidize investment by instituting an investmenttax credit.a) What happens to world investment demand as a function of the world interest rate?b) What happens to the world interest rate?c) What happens to investment in our small open economy?d) What happens to our trade balance?e) What happens to our real exchange rate?arrow_forwardTrue or False. And why? Suppose the US is a more capital-abundant economy than China. We would expect the trade war to be harmful to capital owners.arrow_forwardWhich is an example of foreign portfolio investment? a. Australian tourists going on a safari in Kenya. b. Indonesian merchants selling coffee beans to Japanese importers. c. US consumers increasing their demand for German automobiles. d. Brazilian banks using pesos to buy stock in Mexican corporations.arrow_forward
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