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Table 5.1 Consider the following table for the country of Ophir Year Nominal GDP GDP Deflator 2018 $8000 100 2019 $8200 105 2
In the 1500s, Europeans purchased stock in Canadian companies, which used the funds to build roads and factories. What type o
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Answer #1

1) Real GDP = (Nominal GDP *100)/Deflator

Real GDP in 2018 =8000*100/100 = $8000

Real GDP in 2019 = 8200*100/105 = $7809.52

Real GDP in 2020 = 8400*100/110 = $7636.37

Big brother real GDP is highest in 2018 followed by 2019 followed by 2020

(b) is the answer to this question. Because real GDP is higher in 2018 and then 2019 and then 2020

(a,c,d) are wrong.

2)Foreign capital investments and foreign direct investment relates to that of direct involvement of state in a company where the decision making power lies with that of the company but here it just purchased stocks and therefore the decision making is not with that of the company. So there are no operations involved in between the investment and that is the reason why this is also not foreign indirect investment which is why

(a,b,c) are wrong

Because it is purchasing stocks which means it is having a part of equity e which is why it is a portfolio investment and that is the reason why

(d) is the answer to this question

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