Econ Notes

Econ Notes - .Alternatively, corporation(thatis,;the

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A capital investment that is owned and operated by a foreign entity is called  foreign direct investment . Alternatively, an American might buy stock in a Mexican  corporation (that is, buy a share in the ownership of the corporation); the  Mexican corporation can use the proceeds from the stock sale to build a new  factory. An investment that is financed with foreign money but operated by  domestic residents is called  foreign portfolio investment . In both cases, Americans  provide the resources necessary to increase the stock of capital in Mexico. That is,  American saving is being used to finance Mexican investment. Diluting the Capital Stock high population growth reduces GDP per worker because rapid growth in the  number of workers forces the capital stock to be spread more thinly. In other  words, when population growth is rapid, each worker is equipped with less 
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This note was uploaded on 01/14/2012 for the course ECON 002 taught by Professor Eudey during the Fall '08 term at UPenn.

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Econ Notes - .Alternatively, corporation(thatis,;the

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