Toyota and Honda Shift Production to North America Toyota plans to stop exporting the Lexus RX to North America from Japan, bui
lding all of the vehicles in North America. The company will invest $98.3 million to boost its production capacity. Honda Motor Co. will shift a major chunk of its manufacturing to North America and increase its production capacity by as much as 40 percent Source: The Wall Street Journal, August 8, 2012 Explain how Toyota's and Honda's actions will change the factor incomes that make up U.S. GDP The decision by Toyota and Honda to build more cars in the United States influences the factor incomes that make up U.S. GDP by increasing ______.
A. U.S. compensation of employees and other factor incomes
B. Japan's compensation of employees and other factor incomes
C. U.S. compensation of employees and increasing Japan's other factor incomes
D. consumption expenditure and investment
A. U.S. compensation of employees and other factor incomes
B. Japan's compensation of employees and other factor incomes
C. U.S. compensation of employees and increasing Japan's other factor incomes
D. consumption expenditure and investment
1 answer:
You might be interested in
Answer:
The cross price elasticity of salsa and guacamole is 0.2. The two goods are substitutes.
Explanation:
The price of guacamole is increased from $2 to $2.5.
Percentage change in price
=
=
= 25%
The demand for salsa rises by 5%.
The cross price elasticity will be
=
=
= 0.2
We see that the cross price elasticity is positive. This means that the two goods are substitutes. When price of one good will increase consumers will prefer the cheaper substitute, increasing its demand.