Suppose That the Real Return from Operating Factories in Canada

question 8

Multiple Choice

Suppose that the real return from operating factories in Canada rises relative to the real rate of return in the United States.Other things the same,

• A)this will increases U.S.net capital outflow and decrease Canadian net capital outflow.
• B)this will decreases U.S.net capital outflow and increase Canadian net capital outflow.
• C)this will only increase U.S.net capital outflow.
• D)this will only increase Canadian net capital outflow.

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Definitions:

Labor

Refers to human effort, whether physical or mental, used in the production of goods and services.

Derived Demand

The demand for a good or service that results from the demand for a different, or intermediate, good or service.

Resources

Assets, materials, and human capabilities used to produce goods and services in an economy.

Final Goods

Refers to products that have completed the manufacturing process and are purchased by consumers without further processing.