Which of the following is likely to be a benefit of foreign investment in a developing country?

Which of the following is likely to be a benefit of foreign investment in a developing country?
 a. Domestic firms are subjected to foreign competition
  b. Labor-intensive industries grow quickly
  c. New technology is adapted
  d. The natural rate of unemployment falls to zero
  e. The rate of inflation declines

Question 2

When your neighbor's dog barks all night long, this is an example of a negative externality.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 3

If policy makers expand aggregate demand, they can lower unemployment ____, but only by ____.
 a. temporarily; decreasing inflation
  b. temporarily; increasing inflation
  c. permanently; decreasing inflation
  d. permanently; increasing inflation

Question 4

What is a trade credit?
 a. A credit card purchase
  b. A government loan for exporters
  c. The extension of a period of time before which an importer must pay for goods and services purchased
  d. An IMF loan to meet trade deficit and liabilities for hard currencies
  e. The time it takes for franchisees to pay for the products they obtain from the main franchiser

Question 5

When one more car enters a crowded highway it increases the travel times of all other drivers on the highway creating a negative externality.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 6

According to the Phillips curve analysis, if policy makers reduce aggregate demand growth, they can lower inflation, but only at the cost of a:
 a. permanent increase in the natural rate of unemployment.
  b. permanent increase in the actual unemployment rate.
 c. temporary increase in unemployment.
 d. temporary decrease in the natural level of unemployment.

Question 7

International trade financing is dominated by:
 a. the U.S. Agency for International Development.
  b. private export-import agencies.
  c. the World Bank.
  d. the IMF.
  e. commercial bank syndicates.

Question 8

A cost that spills over onto individuals not directly involved in an activity is called a positive externality.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 9

In the short run, the Phillips Curve indicates a(n):
 a. inverse relationship between inflation and unemployment.
  b. direct relationship between inflation and unemployment.
  c. inverse relationship between GDP and unemployment.
 d. direct relationship between GDP and unemployment.

Question 10

_____ is the purchase of securities, like stocks and bonds of foreign firms.
 a. Short selling
  b. Foreign direct investment
  c. Future contracts
  d. Portfolio investment
  e. Reverse trading