Suppose that FDI has "spillover" benefits for the recipient nation (such as spurring technological innovation, more FDI, or growth in labor productivity). These spillover effects might help explain why:
a. in Singapore, wages fell in the short run.
b. in Singapore, wages fell and returns to capital rose in the long run.
c. in Singapore, wages rose and, depending on the calculation used, returns to capital were close to original levels in the long run, which contradicted the HO model.
d. in Singapore, absolutely nothing changed in either the short or the long run.
Ans: c. in Singapore, wages rose and, depending on the calculation used, returns to capital were close to original levels in the long run, which contradicted the HO model.
You might also like to view...
A product that is produced in 2015 and not sold until 2016 will be counted in the GDP for
a. both 2015 and 2016. b. neither 2015 nor 2016. c. 2015. d. 2016.
The actual rate of unemployment will generally
a. increase as an economy enters an economic boom period. b. decrease as an economy enters an economic boom period. c. exceed the natural rate of unemployment during an economic boom period. d. do both a and c.