A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result,
a. U.S. investment and GDP increase, but German GDP is unaffected.
b. U.S. investment and German GDP increase, but U.S. GDP is unaffected.
c. U.S. investment, U.S. GDP, and German GDP are unaffected because tractors are intermediate goods.
d. U.S. investment, U.S. GDP, and German GDP all increase.
a
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If we consider the specificfactors model, the effect of an increase in exports on the real wages of workers:
a. is inconclusive because some goods' prices will be higher compared with the wage, and some will be lower. b. absolutely increases the buying power of the real wage. c. absolutely decreases the buying power of the real wage. d. will encourage foreign workers to emigrate to the United States.
Which of the following statements is CORRECT?
A) When demand increases, both the price and the quantity increase. B) When demand decreases, the price rises and the quantity decreases. C) When supply increases, the quantity decreases and the price rises. D) When supply decreases, both the price and the quantity decrease.