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In the Short-Run (Specific-Factors) Model, Foreign Direct Investment Is Expected

Question 9

Multiple Choice

In the short-run (specific-factors) model, foreign direct investment is expected to cause a(n) ________in the production of the capital-intensive good and a(n) ________in the production of the land-intensive good in the receiving country.


A) decrease; decrease
B) increase; decrease
C) decrease; increase
D) increase; increase

Correct Answer:

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