Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 24 May 2017, 13:20

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Completely clueless on this one 1)foreign investment is

Author Message
Manager
Joined: 12 Jul 2003
Posts: 198
Followers: 2

Kudos [?]: 81 [0], given: 0

Completely clueless on this one 1)foreign investment is [#permalink]

### Show Tags

12 May 2005, 23:26
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 3 sessions

### HideShow timer Statistics

Completely clueless on this one

1)foreign investment is composed of direct investment transactions (investment in plant, equipment and land)and securities investment transactions.Throughout the post world war II period, net increases in US direct investment in europe(funds outflows) exceeded net new european direct investment in the US
Each of the following could help account for this trend except

a)Land values in europe were increasing at a faster rate than in the US
b)Duties on imported goods in europe were higher than those imposed by the US
c)The cost of labour was consistantly lower inh europe than US
d)Labor mobility was much higher in the US than in europe
e)Corporate liquidity was lower in europe than un US

2)At a political rally at Jefferson stadium, cadidate smith exclaimed:"nearly everyone at the rally is behind me.It looks like im going to be elected".

Which of the following best supports the above conclusion
a)Smith's opponent also appeared at the rally
b) the rally was attended by almost all residents of smith's constituency
c)smith was never defeated in an election
d)Smith was supported by the local mayor
e)People always vote their emotions

Best.
Senior Manager
Joined: 10 Nov 2004
Posts: 291
Followers: 1

Kudos [?]: 19 [0], given: 0

### Show Tags

13 May 2005, 00:38
1. I'll pick B.
Duties on imported goods in europe were higher than those imposed by the US

It has nothing to do with foreign investment. Avn even if it does, it would weaken the conclusion.

2. B.
All present in the rally supported Smith.
Smith wins the election.
=> No one else besides the ones in the rally voted.

B says the same.
Manager
Joined: 12 Jul 2003
Posts: 198
Followers: 2

Kudos [?]: 81 [0], given: 0

### Show Tags

13 May 2005, 22:05
the answers are d and b.

could we have a more detailed analysis on the first one.

Best.
Director
Joined: 18 Apr 2005
Posts: 547
Location: Canuckland
Followers: 1

Kudos [?]: 37 [0], given: 0

### Show Tags

13 May 2005, 22:34
a)Land values in europe were increasing at a faster rate than in the US
HIgher rates of investment drives land values up

b)Duties on imported goods in europe were higher than those imposed by the US
Market access, since tariffs are higher in Europe, it's better to go there directly and direct invest

c)The cost of labour was consistantly lower inh europe than US
Lower labor costs - more investment

d)Labor mobility was much higher in the US than in europe
Higher labor mobility is good for business, but since it was higher in the US, this goes agains the trend

e)Corporate liquidity was lower in europe than un US
Investment is more liquid, good. Liquidation costs are lower.
Director
Joined: 18 Apr 2005
Posts: 547
Location: Canuckland
Followers: 1

Kudos [?]: 37 [0], given: 0

### Show Tags

13 May 2005, 22:42
It's a tough question, I won't probably be able to do it on the exam. I don't think even pro economists wil get it right in 1.5 min.
Manager
Joined: 04 May 2005
Posts: 104
Location: Austin, Texas
Followers: 2

Kudos [?]: 15 [0], given: 0

### Show Tags

13 May 2005, 23:24
sparky wrote:
It's a tough question, I won't probably be able to do it on the exam. I don't think even pro economists wil get it right in 1.5 min.

Sparky's analysis is right-on (I'd only add for the last distractor, if Europe corporations are illiquid, that cries out for a cash infusion, encouraging investment from outside). However, this is SUCH a technically tough question -- requiring some understanding of Economics terms and some actual thinking -- that it strikes me as quite inappropriate as a GMAT question. Bet it didn't come from an Official Guide...

(Question 2 is more charactersistic of an ETS question though).
Director
Joined: 05 Jan 2005
Posts: 558
Followers: 2

Kudos [?]: 22 [0], given: 0

### Show Tags

14 May 2005, 11:57
1.
2. (E)

Refuting (B): It says... the rally was attended by almost all residents of smith's constituency.

What if all residents of the consistuency of smith's rival attended, and this no. was higher than the no. in smith's constituency?
Manager
Joined: 12 Jul 2003
Posts: 198
Followers: 2

Kudos [?]: 81 [0], given: 0

### Show Tags

14 May 2005, 22:11
u bet its a tough question sparky.im with u.

what do u mean by labour mobility and corporate liquidity? i still havent understood d and e very well.

Yes its not from official gmat guide.

Best.
Director
Joined: 18 Apr 2005
Posts: 547
Location: Canuckland
Followers: 1

Kudos [?]: 37 [0], given: 0

### Show Tags

14 May 2005, 22:49
labour mobility - how fast labour can reallocate
liquidity - how fast you can turn things into cash
Manager
Joined: 12 Jul 2003
Posts: 198
Followers: 2

Kudos [?]: 81 [0], given: 0

### Show Tags

15 May 2005, 20:03

Best.
Director
Joined: 05 Jan 2005
Posts: 558
Followers: 2

Kudos [?]: 22 [0], given: 0

### Show Tags

16 May 2005, 03:38
Arsene_Wenger wrote:
1.
2. (E)

Refuting (B): It says... the rally was attended by almost all residents of smith's constituency.

What if all residents of the consistuency of smith's rival attended, and this no. was higher than the no. in smith's constituency?

Oh gosh..............what was i thinking?
Senior Manager
Joined: 10 Dec 2004
Posts: 272
Followers: 2

Kudos [?]: 171 [0], given: 0

### Show Tags

16 May 2005, 06:52
I think its "B"

a) Land values in europe were increasing at a faster rate than in the US

Increase in land values, may have made the US investment higher.

b)Duties on imported goods in europe were higher than those imposed by the US
Then, europe should be making more investments or US should be importing more.. this statment doesn;t help see thee trend.

c)The cost of labour was consistantly lower inh europe than US

and hence more investment
d)Labor mobility was much higher in the US than in europe
that's why they invested more in europe.

e)Corporate liquidity was lower in europe than un US

and hence they could not make more investments in US
_________________

"Forums are meant to benefit all. No one is interested in knowing what your guesses are. Please explain the reasoning behind the answer you chose. This will also help you organize your thoughts quickly during the exam."

16 May 2005, 06:52
Similar topics Replies Last post
Similar
Topics:
Which of the following best completes the passage below? One 2 30 Nov 2011, 13:19
Complete the argument 2 24 May 2011, 23:53
Complete the argument 1 25 Oct 2009, 13:09
Which of the following best completes the passage below? One 4 25 Jun 2007, 11:28
Which of the following best completes the passage below? One 14 01 Aug 2007, 21:11
Display posts from previous: Sort by