The relationship between annual real per-capita GDP and ...

[appyboo]

The relationship between annual real per-capita GDP and corruption across countries has been found to be
 
  A) negative.
  B) positive.
  C) The relationship was negative in the late 1960s but is now positive.
  D) The relationship was in the late 1960s but is now negative.
  E) There is no relationship between these two variables.

Question 2

Suppose the two countries can trade shares in the ownership of their perspective assets. Further, assume that a Home owner of a 10 percent share in Foreign land.
 
  He will receive 10 percent share in Foreign land, and thus receives 10 percent of the annual Foreign kiwi fruit harvest. Further assume that a Foreign owner of a 10 percent share in Home land is permitted. In this case, a Foreigner is entitled to 10 percent of the Home harvest. Calculate the expected value of kiwi fruit for each investor. Is the investor better off?

[blakcmamba]

Answer to Question 1

A

Answer to Question 2

Good year at Home: the farmer will get 90 toms of kiwi from home and 5 tons of kiwi from Foreign. Bad years at home: he will get 45 tons of kiwi from his Home and 10 tons from the Foreign country, namely 55 tons. The probability for a good or a bad year is 0.5. Thus the expected returns will now be:
0.5  95 + 0.5  55 = 75
It is not clear whether the investor is better off or not. If he likes to smooth his consumption, he may be better off. Otherwise, it is impossible to tell without a particular utility function.

[appyboo]

Thank you

[blakcmamba]

Happy to help you