chapter 7 hw

chapter 7 hw - accounts for roughly 30 percent of the...

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Colleen Clancy Chapter 7 Homework 6. a. It was better for the United States to receive the foreign portfolio investments in particular because Japan provided the money up front to finance the investment itself. Without Japanese involvement the investment would have to search elsewhere for an entity to finance the portfolio. It was better for the United States to keep their own money in savings than have to finance their own investment. With foreign investment comes an increase in wages as well as the total stock of capital in the economy. b. A major downside was that some of the benefits that the United States should receive flow back to the foreign owners. If the US invested it’s own savings in the portfolio more of the benefits would flow back into the US economy. 8. a. Robert Fogel, an economic historian won the Nobel Peace Prize in 1993 in economics. His conclusion of his studies that won him the award was that, “improved gross nutrition
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Unformatted text preview: accounts for roughly 30 percent of the growth per captia income”. Other studies have suggested that with higher wages, people have more money to afford the cost of sufficient food which thus decreases the total quantity of malnourished citizens. So, it can be reasoned that higher wages will ultimately create better health. b. With proper nutrition, people are able to perform more efficiently and produce more than those malnourished individuals. So it only makes sense that if people have better health by consuming sufficient nutrients, they can work faster and increase their overall income. c. These hypotheses are important because they can help affect public policy. If public policies can increase the rate of economic growth, heath problems would decrease and economic growth in the long run would continue to grow....
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This note was uploaded on 04/08/2008 for the course ECON 1002 taught by Professor Rissell during the Spring '08 term at Villanova.

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