How Can We Model the Long-Run Effect of FDI Flows

question 60

Multiple Choice

How can we model the long-run effect of FDI flows on wages and rentals?

• A) Use a simple supply-and-demand approach.
• B) Use the Ricardian comparative advantage model.
• C) Use the Heckscher-Ohlin model with the assumption that capital can migrate.
• D) Use the Rybczynski theorem.

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Definitions:

Accounts Payable

Money that a company owes to its suppliers or vendors for goods and services received but not yet paid for.

Merchandise Inventory

The total cost of all goods that a company has in stock and available for sale, at any given time.

Merchandise Inventory

The total value of a company's goods that are ready for sale but still in stock, representing a current asset on the balance sheet.

Accounts Payable

A liability in the form of amounts owed by a company to its creditors or suppliers for goods or services received.