CAS EC 102 Chapter Notes - Chapter 11: Root Mean Square, Foreign Direct Investment, Foreign Portfolio Investment

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: All

Document Summary

Ec102 - pages 360-361 & 11. 4 textbook notes. The pro t an entrepreneur hopes to earn provides the incentive for bringing together the factors of production labor, capital, and natural resources to start new rms and introduce new goods and services. Increase the quantity of capital per hour worked: use the best available technology. The economic growth model predicts that poor countries will grow faster than rich countries. Catch-up/convergence the prediction that the level of gdp per capita (or income per capita) in poor countries will grow faster than in rich countries. Low rates of savings and investment vicious cycle of poverty. The bene ts of globalization foreign direct investment (fdi) occurs when corporations build or purchase facilities in foreign countries. Foreign portfolio investment occurs when an individual or a rm buys stocks or bonds issued in another country. Globalization, refers to process of countries becoming more open to foreign trade & investment.