Questions: Suppose Hondamaha, a motorcycle manufacturing firm headquartered in Japan, builds a production plant in Arizona. This is an example of foreign investment in the United States. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. - Pursuing inward-oriented policies - Imposing restrictions on foreign ownership of domestic capital - Protecting property rights and enforcing contracts - Increasing taxes on income from savings In less developed countries, what does the term brain drain refer to? - Rapid population growth that lowers the stock of capital per worker - The emigration of highly skilled workers to rich countries - Rapid population growth that increases the burden on the educational system - Lower productivity due to a malnourished workforce

The answer to the first question is: Foreign Direct Investment (FDI). When Hondamaha, a Japanese motorcycle manufacturing firm, builds a production plant in Arizona, it is an example of foreign direct investment in the United States. FDI occurs when a company or individual from one country makes an investment into a business in another country, typically by establishing operations or acquiring business assets in the foreign country.

For the second question regarding policies consistent with increasing productivity and growth in developing countries, the correct options are:

• Protecting property rights and enforcing contracts: This policy is crucial for economic growth as it provides a secure environment for businesses to operate, encourages investment, and ensures that businesses and individuals can rely on the legal system to uphold agreements.

Explanation for each option:

• Pursuing inward-oriented policies: This is generally not consistent with increasing productivity and growth. Inward-oriented policies, such as protectionism, can limit trade and foreign investment, which are often important for growth in developing countries.
• Imposing restrictions on foreign ownership of domestic capital: This can deter foreign investment, which is often a source of capital, technology, and expertise for developing countries, thus not consistent with growth.
• Protecting property rights and enforcing contracts: As mentioned, this is essential for creating a stable business environment and encouraging investment.
• Increasing taxes on income from savings: This can discourage savings and investment, which are important for capital accumulation and growth, making it inconsistent with the goal of increasing productivity and growth.

For the third question about the term "brain drain" in less developed countries, the answer is: The emigration of highly skilled workers to rich countries. Brain drain refers to the phenomenon where educated and skilled individuals leave their home country to seek better opportunities abroad, often resulting in a loss of talent and human capital for the home country.