Question
In: Economics
If I am a low-skilled worker in a labor intensive, capitally high country(rich), would I prefer...
If I am a low-skilled worker in a labor intensive, capitally high country(rich), would I prefer direct foreign investment or portfolio investment as policy?
Can you please elaborate why?
Solutions
Expert Solution
Foreign direct investment and portfolio investment are two
different types of policies in which one can invest. There exist a
difference between these two types of policies. The individual who
is interested in the policies of some other country and wants to
invest in that country prefer foreign direct investment. Portfolio
investment is usually preferred by those who want the returns from
their investment within a short period of time.
The low skilled workers of a labour intensive and rich country
usually prefer portfolio investments over foreign direct investment
as people living in a capitally high country don’t need to invest
in some other country for ownership as the policies of their
country for owning any property or asset would be better than any
other country.
Also, foreign direct investment requires more knowledge to invest
than in portfolio investment which will be difficult for a low
skilled worker to understand.
Rahul Sunny answered 2 years agoRelated Solutions
Suppose that you are a semi-skilled (lowly-skilled) worker employed in a labor-intensive industrial sector. Your country...
Suppose that you are a semi-skilled (lowly-skilled) worker
employed in a labor-intensive industrial sector. Your country is
capital abundant, that is, its endowment of capital relative to
other factors is large compared to its major trading partners.
Explain your policy preferences about international trade, foreign
investment, and immigration.
Suppose low skilled labor and capital are substitutes but high skilled labor and capital are complements....
Suppose low skilled labor and capital are substitutes but high
skilled labor and capital are complements. Over the past 45 years
the price of capital has dropped substantially because of the
computer revolution. Draw and explain 2 labor market diagrams
To show what has happened to the demand for high and low
skilled labor
Now add new supply curves to your diagrams to show the effect
of an increase in the number of high skilled workers and a decrease
in...
A firm can use either high skilled or low skilled workers in production. One high skilled worker can produce as much as 2 low skilled workers.
A firm can use either high skilled or low skilled workers in
production. One high skilled worker can produce as much as 2 low
skilled workers.a.Draw isoquants for a production process, the inputs of which
are high cost and low cost workers. (Hint: Marginal rate of
technical substitution is constant)Unions represent high skilled workers. They are only concerned
about the level of employment and wages for high skilled workers.
The wage for high skilled workers is $10. Low skilled workers...
Consider the markets for low-skilled and high-skilled labor. a. Suppose the government introduces a subsidy to...
Consider the markets for low-skilled and high-skilled labor.
a. Suppose the government introduces a subsidy to the
employment of low-skilled workers physically paid to firms. (For
simplicity, assume the government pays firms some amount for each
low-skilled worker they hire.) How will the subsidy affect the
employment of low-skilled workers, the wage low-skilled workers
receive, and net of-subsidy wage for low-skilled workers paid by
firms? Will this policy tend to increase, decreaseor have no effect
on income inequality (or is...
Consider the markets for low-skilled and high-skilled labor. a. Suppose the government introduces a subsidy to...
Consider the markets for low-skilled and high-skilled labor.
a. Suppose the government introduces a subsidy to the employment
of low-skilled workers physically paid to firms. (For simplicity,
assume the government pays firms some amount for each low-skilled
worker they hire.) How will the subsidy affect the employment of
low-skilled workers, the wage low-skilled workers receive, and the
netof-subsidy wage for low-skilled workers paid by firms? Will this
policy tend to increase, decrease, or have no effect on income
inequality (or...
Consider the markets for low-skilled and high-skilled labor in the United States. Describe how each of...
Consider the markets for low-skilled and high-skilled labor in
the United States. Describe how each of the following developments
is likely to affect the wages of low-skilled workers relative to
high-skilled workers.
a) There is an increased demand for apps and smart appliances,
which are produced by high-skilled workers.
b) The government pays employers a subsidy for each low-skilled
worker they employ.
c) Some low-skilled workers get more education, and so become
high-skilled workers.
7) Consider the markets for low-skilled and high-skilled labor in the United States. Draw two graphs...
7) Consider the markets for low-skilled and high-skilled labor
in the United States. Draw two graphs how each of the following is
likely to affect the wages of low-skilled workers relative to
high-skilled workers.
a) Suppose that the government decided to approve more H-1B visa
for high-skilled workers. In other words, more high-skilled workers
come to the U.S. from foreign countries.
b) The aging of the U.S. population increases the demand for
services such as home health care, home maintenance,...
Consider the market for labor is segmented into the market for low skilled labor and the...
Consider the market for labor is segmented into the market for
low skilled labor and the market for high skilled labor. If the low
skilled labor market is given by the following function: labor
demand: w = 35 – 0.005L; and labor supply is 4000. If the high
skilled labor market is given by the following functions: labor
demand: w = 400 – 2L, and the labor supply function is given
by w = 160 + 1.2L. The hourly wage...
Consider the market for labor is segmented into the market for low skilled labor and the...
Consider the market for labor is segmented into the market for
low skilled labor and the market for high skilled labor. If the low
skilled labor market is given by the following function: labor
demand: w = 35 – 0.005L; and labor supply is 4000. If the high
skilled labor market is given by the following functions: labor
demand: w = 400 – 2L, and the labor supply function is given by w =
160 + 1.2L. The hourly wage...
Suppose that a Home country is a labor-abundant country, and produces bananas (labor intensive) and computers...
Suppose that a Home country is a labor-abundant country, and
produces bananas (labor intensive) and computers (capital
intensive). Given all the theory and assumptions of the
Heckscher-Ohlin model holds true, answer the following
questions:
A). Draw and explain in a graph the free trade equilibrium for
Home Country (Remember PPFs? Make sure to clearly indicate the
production point, the consumption point, and the quantity of
exports and imports).
B). In the graph drawn above for question (a), show the effects...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
- Given an array of positive integers a, your task is to calculate the sum of every...
- Define “culture.” Software is defined by the Merriam-Webster Dictionary as "the programs that run on a...
- In humans, hypotrichosis (sparse body hair) is a rare autosomal recessive condition. Let h = hypotrichosis...
- Increase all of the listing prices by 5% for all listings under $500,000 and 10% for...
ADVERTISEMENT