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bearhunter [10]
2 years ago
14

Suppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama. This is an example of foreign

direct investment in the United States.
True or False?
Business
1 answer:
Alika [10]2 years ago
3 0

Answer:

The statement is true, as it is an example of foreign direct investment.

Explanation:

Foreign direct investment is the direct investment by individuals or legal persons in production or business operations abroad. In this context, investments include both acquisition of foreign operations and expansion of own operations.  

Foreign direct investment does not include the purchase of either shares or bonds per se. More specifically, the IMF has restricted direct investment on acquisitions to cases where the foreign investor owns 10% or more of the shares that give administrative rights in the business. Investment funds that can be classified as foreign direct investments therefore include equity deposits, reinvestments of dividends from the business, as well as the allocation of short-term and long-term loans between parent companies and subsidiaries.  

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In year T, a US citizen buys 100 shares of Sonic on the Tokyo stock exchange at 700 yens each. Suppose the exchange rate then is
zlopas [31]

Answer:

Change in US external wealth between periods T and T +1 in dollars = -$100

Explanation:

Since nothing else changes, this implies that the exchange rate per yen is $0.01 in periods T and T +1. Therefore, we have:

Value shares of Sonic in period T in dollar = Number of shares of Sonic bought in period T * Price per share of Sonic in Yen in period T * Exchange rate per yen in periods T = 100 * 700 * $0.01 = $700

Value shares of Sonic in period T+1 in dollar = Number of shares of Sonic in period T+1 * Price per share of Sonic in Yen in period T+1 * Exchange rate per yen in period T+1 = 100 * 600 * $0.01 = $600

Change in US external wealth between periods T and T +1 in dollars = Value shares of Sonic in period T+1 in dollar - Value shares of Sonic in period T in dollar = $600 - $700 = -$100

4 0
3 years ago
How does the velocity of money affect a national economy?.
qaws [65]

Answer:

when the velocity of money is high, it means each dollar is moving fast to purchase goods and services. It reflects high demand,which generates more production. When the velocity is low, each dollar is not being used very often to buy things.

8 0
2 years ago
Roe Corporation owns 2,000 shares of WRJ Corporation stock. WRJ Corporation has 25,000 shares of stock outstanding. WRJ paid $4
Fudgin [204]

Answer:

c. Debit Cash, $8,000; credit Dividend Revenue, $8,000

Explanation:

In the given scenario the number of shares owned by Roe Corporation is 2,000 shares out of a total of 25,000 shares.

So when dividend of $4 is given per share, Roe will have dividend of

Dividend = Number of shares * Dividend per share

Dividend = 2000 * 4

Dividend = $8,000

The entry to indicate reciept of the dividend will be Debit Cash, $8,000; credit Dividend Revenue, $8,000

Cash is an asset account. It increases as the debit balance increases.

So a reciept of $8,000 from the shares owned will result in a cash increase. Therefore cash is debited $8,000

Dividend revenue is a revenue account that increases as positive balance increases.

When the share dividend is recieved revenue increases.

Therefore we will credited Dividend revenue by $8,000 to recognise the increase in revenue

4 0
2 years ago
Suppose the U.S. GDP growth rate is faster relative to other​ countries' GDP growth rates. U.S. imports will therefore increase
Leni [432]

Answer:

Option (B) is correct.

Explanation:

If there is an any change in the GDP of a particular nation then as a result this will shift the demand curve. Increase in GDP or an increase in the income level of the people will shift the demand curve for goods rightwards. With the higher level of income, the consumer's demand for goods increases.

Any change in the price level of the goods will affect the quantity demanded for that goods and there is a movement along a demand curve.

5 0
3 years ago
Nathan's business constructs storage sheds for new housing developments as requested by the builders. Nathan's business would be
nalin [4]

Answer:

<em>Manufacturing Business</em>

Explanation:

A manufacturing business is any<em> business that assembles finished products using raw materials, parts, and components. </em>

Manufacturing companies often use machines, robots, computers, and people to manufacture the products and usually use an assembly line that allows a product to be produced step by step, going from one workstation to another.

3 0
3 years ago
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