Economics

Which of the following is NOT a problem in the implementation of indus

Which of the following is NOT a problem in the implementation of industrial policies? A) Choosing the industry to target B) Knowing the optimum amount of resources to provide the targeted industry C) The encouragement of rent seeking by firms in other industries D) The benefits are partly captured by foreign firms. E) All of […]

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Date: September 10th, 2020

An example of how GNP accounts for services provided by foreign-owned

An example of how GNP accounts for services provided by foreign-owned capital (and GDP does not) is A) earnings of a Spanish factory with British owners counts only in Spain’s GDP. B) earnings of a Spanish factory with British owners counts only in Britain’s GNP. C) earnings of a Spanish factory counts in Spain’s GNP […]

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Date: September 10th, 2020

Is a depreciation of the dollar/euro exchange rate correlated with a d

Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? What will be an ideal response?   ANSWER No. Assume that the Interest Parity is maintained, i.e., R$ = + ( – )/ Holding constant, one would expect a depreciation of the dollar/euro exchange rate (i.e. […]

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Date: September 10th, 2020

Describe how Mexico’s development strategy changed from the 1950s to t

Describe how Mexico’s development strategy changed from the 1950s to today and how that changed the production location decisions of firms. What will be an ideal response?   ANSWER From the 1950s throughout the 1970s Mexico’s development policy emphasized the domestic market and firms found that it was less profitable to export. Domestic production was […]

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Date: September 10th, 2020

According to the text, which of the following factors may make the the

According to the text, which of the following factors may make the theory of purchasing power parity unrealistic? A) Purchasing power parity works only with traded goods. B) Trading countries may stop exchanging goods once prices between them equalize. C) Shipping, insurance, and transaction costs may reduce the implication of purchasing power parity. D) Prices […]

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Date: September 10th, 2020