Direct Investment Inflows by Foreigners into the United States Have

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The Answer is According to the Heckscher-Ohlin model, direct investment inflows by foreigners into the United States would lead to an increase in the level of capital in the country. This increase in capital would likely lead to an increase in the production of capital-intensive goods in the United States, as the country now has more capital to allocate towards the production of these goods.

As a result, the pattern of U.S. trade would likely shift towards exporting more capital-intensive goods and importing more labor-intensive goods. This is because the United States would now have a comparative advantage in the production of capital-intensive goods due to the increase in capital from foreign direct investment.

In terms of the level of world output, the increase in direct investment inflows into the United States would likely lead to an overall increase in world output. This is because the Heckscher-Ohlin model suggests that countries specialize in the production of goods for which they have a comparative advantage, leading to more efficient production and higher overall output.

Therefore, the net inward movement of capital into the United States would likely lead to a shift in the pattern of U.S. trade and an increase in the level of world output, according to the Heckscher-Ohlin model.

Direct Investment Inflows by Foreigners into the United States Have

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Direct Investment Inflows by Foreigners into the United States Have

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Correct Answer:
Answered by ExamLex AI