Question

5. Economic growth and public policy Suppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama. This is an example of foreign investment in the United States. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. Pursuing inward-oriented policies Increasing taxes on income from savings U Providing tax breaks and patents for firms that pursue research and development in health and sciences Protecting property rights and enforcing contracts In less developed countries, what does the term brain drain refer to? Rapid population growth that increases the burden on the educational system Lower productivity due to a malnourished workforce Rapid population growth that lowers the stock of capital per worker The emigration of highly skilled workers to rich countries

portfolio/direct

Answer 1

1.

Foreign direct investment

Reason: This is because investment is made in developing a manufacturing plant in foreign country, also known as FDI.

Portfolio investment is where investment is made in shares or stocks of foreign country entity.

2.

Pursuing inward oriented policies

Providing tax breaks and patents for firms that pursue research and development in health and sciences

These two policies would help individuals as well as businesses to focus on productivity in order to achieve higher growth and development

3.

The emigration of highly skilled workers to rich countries

Reason: When highly skilled workers migrate to richer countries in hopes of making more money and settling down, it is called brain drain