If the Information Technology Boom Increases Investment Demand in the Basic

question 51

Multiple Choice

If the information technology boom increases investment demand in the basic model of a small open economy,then net exports ______ and the real exchange rate ______.

• A) increase; appreciates
• B) increase; depreciates
• C) decrease; appreciates
• D) decrease; depreciates

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Definitions:

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or any other business activity.

Global Market Entry

Strategies and methodologies businesses use to enter international markets, including exports, franchising, and direct investment.

Frito-Lay's

A subsidiary of PepsiCo that manufactures and sells a wide range of snack foods including chips and crisps.

Licensing

Involves granting permission to an individual or entity to use intellectual property, such as patents, trademarks, or technology, under agreed terms and conditions.