After the passage of the North American Free Trade Agreement, which made it less expensive to import goods from Mexico, workers in some industries found their factories being relocated to Mexico to take advantage of lower labor costs
These workers experienced what type of unemployment?
A) cyclical B) trade C) foreign D) structural E) frictional
D
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Suppose the government raises the minimum wage in the economy. All else constant, how will this affect the quantity of labor demanded and the quantity of labor supplied?
What will be an ideal response?
The amount of unemployment caused by efficiency wages:
A. has been measured by economists to be minimal. B. has been found to be quite large in markets that have mostly minimum-wage workers. C. is larger in sectors that have more less-skilled workers in them. D. has little conclusive evidence in economic research.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government now decides to impose a quota to limit T-shirt imports to 20 million per year. With the import quota in place, the domestic price rises to $12 per T-shirt and domestic production rises to 15 million T-shirts per year. The quota on T-shirts causes domestic consumers to
A. gain $7 million. B. lose $70 million. C. lose $7 million. D. lose $77 million.