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Chap012

# Chap012 - Chapter 12 International Factor Movements Chapter...

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Chapter 12 - International Factor Movements Chapter 12 International Factor Movements Multiple Choice Questions FIGURE 1 1. In Figure 1, without capital movements between countries I and II, the capital stock in country I is 0K1 and the capital stock in country II is K10'. The return to capital in country I is thus __________ and the return to capital in country II is __________. a. 0r1; 0'r'1 b. 0r3; 0'r'1 C . 0r1; 0'r'3 d. 0r2; 0'r'3 2. In Figure 1, if restrictions on capital flows were removed, capital would move from __________, and this movement would reduce the return to capital in __________. a. Country I to country II; country I B . Country I to country II; country II c. Country II to country I; country I d. Country II to country I; country II 12-1

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Chapter 12 - International Factor Movements 3. In Figure 1, if restrictions on capital flows were removed and capital was allowed to flow freely from the low-return country to the high-return country, then world output would rise by the amount of area __________. 4. In Figure 1, if all restrictions on capital flows were removed and capital was allowed to flow from the low-return country to the high-return country, then total output in country II would rise by area __________. 5. In Figure 1, if restrictions on capital flows were removed and capital was allowed to flow freely from the low-return country to the high-return country, then national income (i.e.,
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Chap012 - Chapter 12 International Factor Movements Chapter...

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