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Question 1: Suppose that society decided to reduce consumption and increase investment: (a.) How would this change affect economic growth? (b.) What groups in society would be benefit from this change? What groups might be hurt?

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Question 1: Suppose that society decided to reduce consumption and increase investment: (a.) How would this change affect economic growth? (b.) What groups in society would be benefit from this change? What groups might be hurt?

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 Question 2: Suppose that an auto company owned entirely by German citizens opens a new factory in South Carolina: (a.) What soft of foreign investment would this represent? (b.) What would be the effect of this investment on U.S. GDP? Would the effect on U.S. GNP be larger or smaller

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 Question 2: Suppose that an auto company owned entirely by German citizens opens a new factory in South Carolina: (a.) What soft of foreign investment would this represent? (b.) What would be the effect of this investment on U.S. GDP? Would the effect on U.S. GNP be larger or smaller

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 Question 3: In the 1990s and the first decade of the 200s, investors from the Asian economies of Japan and China made significant direct and portfolio investments in the United States At the time, Many Americans were unhappy that this investment was occurring. (a.) In what way was it better for the United States to receive this foreign investment than not to receive it? (b.) In what way would it have been better still for Americans to have made this investment than not to receive it? 

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 Question 3: In the 1990s and the first decade of the 200s, investors from the Asian economies of Japan and China made significant direct and portfolio investments in the United States At the time, Many Americans were unhappy that this investment was occurring. (a.) In what way was it better for the United States to receive this foreign investment than not to receive it? (b.) In what way would it have been better still for Americans to have made this investment than not to receive it? 

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Question 4: From 1950 to 2000, manufacturing employment as a percentage of total employment in the U.S. economy fell from 28% to 13%. At the same time, manufacturing output experienced slightly more rapid growth than the overall economy. (a.) What do these facts say about growth in labor productivity (defined as output per worker) in manufacturing (b.) In your opinion, should policymakers be concerned about the decline in the share of manufacturing employment? Explain.

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Question 4: From 1950 to 2000, manufacturing employment as a percentage of total employment in the U.S. economy fell from 28% to 13%. At the same time, manufacturing output experienced slightly more rapid growth than the overall economy. (a.) What do these facts say about growth in labor productivity (defined as output per worker) in manufacturing (b.) In your opinion, should policymakers be concerned about the decline in the share of manufacturing employment? Explain.

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a. It represents foreign direct investment.
b. The investment increases U.S. GDP because it increases production in the United States. The effect on U.S. GNP would be smaller because the owners would get paid a return on their investment that would be part of German GNP rather than U.S. GNP.

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Question 1:
a. If society decided to reduce consumption and increase investment, economic growth would grow and productivity would increase. A general increase of investment creates a larger stock of capital and higher economic growth for a certain period of time. This new tendency will be visible especially if the country is poor due to the diminishing returns to capital.

b. As greater productivity creates lower costs and bigger profit, therefore there is greater employment. So, in the long term, more or less, all groups will somehow benefit from this change. But because of savings and lower consumption, the general sale will be at a lower point

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a. The quality of labor productivity is higher than before (maybe because education)
b. Yes. Because that means the market is more competitive and more ppl will be unemployed