Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?
Correct answer: C. increasing direct investment into the United States
- A. increasing portfolio investment into the United States
- B. decreasing portfolio investment into the United States
- C. increasing direct investment into the United States
- D. decreasing direct investment into the United States
Explanation
Higher U.S. income, sales, and profits make production in the United States more attractive to foreign firms, encouraging direct investment in factories or businesses. Portfolio investment concerns financial securities rather than ownership or control of productive operations.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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