As workforces become more educated in countries with comparative advantages in labor-intensive products, cheap labor becomes:
A. more abundant relative to capital.
B. less abundant relative to skilled labor.
C. more abundant relative to skilled labor.
D. None of these is true.
Answer: B
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Suppose the target exchange rate set by the Fed is 100 guilders per dollar. If the demand for dollars temporarily decreases, to maintain the target exchange rate, the Fed can
A) sell dollars. B) buy dollars. C) increase U.S. exports. D) increase U.S. imports.
An increase in the saving rate results in a higher steady state ________
A) growth rate of capital B) growth rate of output per worker C) level of consumption per worker D) level of capital per worker
Public debt held by foreigners is known as
a. international debt b. external debt c. tariffs d. custom duties e. debentures
Technological changes can create dislocations as displaced workers try to find jobs elsewhere and at the same time make existing products more affordable
Indicate whether the statement is true or false