Suppose That the Real Return from Operating Factories in Mexico

question 145

Multiple Choice

Suppose that the real return from operating factories in Mexico rises relative to the real rate of return in Canada. What are the effects of this transaction?

• A) This will increase Canadian net capital outflow and decrease Mexican net capital outflow.
• B) This will decrease Canadian net capital outflow and increase Mexican net capital outflow.
• C) This will only affect Canadian net capital outflow.
• D) This will only affect Mexican net capital outflow.

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Definitions:

Colorfulness

The degree to which a visual stimulus is perceived as vivid or saturated, as opposed to dull or washed out.

Wavelength

The distance between successive crests of a wave, especially points in a sound wave or electromagnetic wave.

Pupil

The opening in the center of the iris of the eye that allows light to enter the retina.

Iris

The colored part of the eye that controls the size of the pupil and the amount of light that enters the eye.