The existence of economies of scale suggests that
A. foreign direct investment (FDI) is a complement to exporting.
B. exporting can be preferable to FDI.
C. inherent disadvantages cannot be fully overcome.
D. licensing local firms in the foreign market is preferable to exporting.
Answer: B
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If the Fed wants to reduce bank reserves, it can:
A. Raise the discount rate or buy bonds on the open market. B. Reduce the minimum reserve ratio or sell bonds on the open market. C. Raise the discount rate or sell bonds on the open market. D. Decrease the minimum reserve ratio or reduce the discount rate.
According to Keynesians, an increase in the money supply will have its least impact on GDP when the aggregate demand curve intersects:
a. the horizontal portion of the aggregate supply curve. b. the vertical portion of the aggregate supply curve. c. the upward sloping portion of the aggregate supply curve. d. either the horizontal or upward sloping portion of the aggregate supply curve. e. either the horizontal or upward sloping portion of the aggregate supply curve.