In the Short-Run (Specific-Factors) Model, an FDI Inflow into a Country's

question 128

Multiple Choice

In the short-run (specific-factors) model, an FDI inflow into a country's manufacturing sector will cause:

• A) an increase in the output of the agricultural sector.
• B) an increase in employment in the agricultural sector.
• C) a decrease in employment in the manufacturing sector.
• D) an increase in the output of and employment in the manufacturing sector.

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Definitions:

Average Tax Rate

The ratio of the sum of taxes paid to the overall income, determined by dividing the total taxes paid by the total income.

Total Income

The sum of all earnings and revenues received by an individual or business, including wages, salaries, investment income, and revenue from sales or services.

Total Taxes

The aggregate amount of taxes paid by an individual, corporation, or other entity to governmental authorities within a specified period.

Payroll Tax

Taxes imposed on employers and/or employees, usually calculated as a percentage of the salaries that employers pay their staff.