Author Question: Suppose a firm is considering locating a manufacturing facility in a poorer country where wage rates ... (Read 67 times)

danielfitts88 · **on:** Jun 29, 2018

Suppose a firm is considering locating a manufacturing facility in a poorer country where wage rates are much lower than in the United States.

Why would social capital be a factor in their decision to relocate? Explain in terms of the impact that a lack of social capital may have on the marginal revenue product

Question 2

Typically, a bank's largest asset is its

A) holdings of securities. B) loans.
C) reserves. D) deposits of its customers.

raenoj · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Social capital refers to the infrastructure of a particular region or country. If the country in question has inadequate social infrastructure like poor roads or schools then it might not be a good decision to relocate because the firms' workers will have a hard time getting to work and won't be as well educated because of the lack of good schools.

Answer to Question 2

B