Which of the following statements regarding the cheap foreign labor argument is correct?
A. If there is an abrupt change in foreign competition that severely penalizes American workers, the U.S. government should immediately adopt protectionist measures.
B. In the long run, labor will be cheap (wages are low) in those nations where labor is most productive.
C. If workers in other countries are willing to supply their products with little compensation, this must ultimately raise the standard of living of the average American worker.
D. American workers can never suffer from foreign competition since our monetary and fiscal policies always produce high employment at home.
Answer: C
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a. it has a quality bias and assumes product quality is constant over time. b. it accounts for more buying at discount stores. c. it under-estimates inflation. d. it assumes product quality that is too high.
If a person is risk averse, then she has
a. diminishing marginal utility of wealth, implying that her utility function gets flatter as wealth increases. b. diminishing marginal utility of wealth, implying that her utility function gets steeper as wealth increases. c. increasing marginal utility of wealth, implying that her utility function gets flatter as wealth increases. d. increasing marginal utility of wealth, implying that her utility function gets steeper as wealth increases.
Price elasticities of supply are always:
A. the same as price elasticities of demand. B. negative numbers. C. positive numbers. D. greater than one.
Saving equals ________
A. income minus consumption expenditure minus net taxes B. income minus net taxes C. total income minus total expenditure D. net taxes minus government expenditure