What Is the Long-Run Effect of Immigration on Capital Use

question 34

Multiple Choice

What is the long-run effect of immigration on capital use in the receiving country?

• A) There will be no change because the remaining capital is not mobile.
• B) Capital will move to the capital-intensive industry.
• C) The return to capital (rental) will fall.
• D) Capital will move to the labor-intensive industry.

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Definitions:

Loanable Funds

The market for lending and borrowing of capital, where the supply comes from savings and the demand comes from borrowers.

Government Deficit

A situation where a government's expenditures exceed its revenues.

Loanable Funds

A term in economics that refers to all the money available for borrowing in the financial markets, determined by the level of savings vs. the demand for borrowing.

NPV

Net Present Value; a calculation used to assess the value of an investment, taking into account the present value of its cash inflow and outflow over time.