Which of the following is an example of the law of one price in action?
A. Wages in India are lower than wages in the United States, and so firms move their call centers to India. This tends to raise wages in India and depress wages in the United States.
B. If one county has a comparative advantage in producing a particular good, another country must have a comparative advantage in producing another good.
C. Prices are just one of the many factors that firms use when deciding where to locate production.
D. Because most industries in the United States are dominated by one or two firms, the dominant firm sets the price and other firms in the industry follow.
Answer: A
You might also like to view...
If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be
A) upward sloping. B) downward sloping. C) horizontal. D) vertical.
It is estimated that, on the average and taking account of skill differentials, union wages are
A) 100 percent higher than nonunion wages. B) less than nonunion wages. C) 10-25 percent higher than nonunion wages. D) 66 percent higher than nonunion wages. E) equal to nonunion wages.
Net migration can help fuel population growth which, in turn, provides a positive incentive for businesses to expand production and employment
Indicate whether the statement is true or false
Theoretically, the net balance of payments is
A. A country's capital inflow minus its capital outflow. B. Foreign demand for a country's currency minus foreign supply. C. The current account plus the capital account. D. Exports minus imports.