Suppose That Rising U

question 99

Multiple Choice

Suppose that rising U.S.income leads to higher sales and profits in the United States.This would likely result in:

• A) Increasing portfolio investment into the United States
• B) Decreasing portfolio investment into the United States
• C) Increasing direct investment into the United States
• D) Decreasing direct investment into the United States

Define investment in economic terms and distinguish it from general financial transactions.

Identify factors that stimulate or slow down investment in varying interest rate environments.

Appreciate the implications of risk and uncertainty in making investment decisions and assess the need for a risk premium.

Understand the basic concept of interest rates and how they are calculated.

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