All of the following are true about foreign direct investment (FDI) and portfolio investment EXCEPT
A) increases in the flow of portfolio investments increase the likelihood of financial crisis.
B) both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy.
C) FDI is relatively illiquid compared to portfolio investment.
D) portfolio investments have been on the decline in recent years (or decades).
E) FDI investors must be willing to go through many ups and downs in order to benefit from their long-term investments.
D
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The more elastic the demand curve, a monopoly
A) will have a larger Lerner Index. B) will face a lower marginal cost. C) will earn more profit. D) will lose more sales as it raises its price.
The main policy conclusion of the rational expectations school is that:
a. fiscal policy lags are so long and variable that such policy is worthless, but monetary policy can be helpful. b. monetary policy lags are so long and variable that such policy is worthless, but fiscal policy can be helpful. c. both monetary and fiscal policy can be helpful if policy makers correctly anticipate the plans of firms and households. d. both monetary and fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers. e. neither monetary nor fiscal policy can be helpful if firms and households correctly anticipate the plans of policy makers.