Answer to Question #219424 in Microeconomics for fanscil

Question

1.    A U.S. firm opens a factory that produces camping equipment in Albania, by itself

a.     this increases U.S. net foreign investment and decreases Albanian net foreign investment.

b.    this decreases U.S. net foreign investment and increases Albanian net foreign investment.

c.     increases only U.S. net foreign investment.

d.    increases only Albanian net foreign investment.

Answer 1

The answer is a.  this increases U.S. net foreign investment and decreases Albanian net foreign investment.