How has global trade affected income inequality? Explain briefly.
What will be an ideal response?
The labor pool effect of globalization means that a greater supply of low-skilled labor has caused the wages of low-skilled workers to fall. The market expansion effect has led to an increase in the demand for high-skilled workers, which has raised the wages of high-skilled workers. Since skilled workers already earned more than unskilled workers, this leads to more income inequality.
You might also like to view...
Prior to the 1980s, S&Ls and mutual savings banks were restricted almost entirely to
A) commercial real estate loans. B) home mortgages. C) education loans. D) vacation loans.
The primary function of reserve requirements is to serve as
A) a source of bank liquidity. B) an instrument of monetary control. C) a means of reducing bank profits. D) a means of controlling the amount of currency in the banking system.
Which of the following will be included as a unilateral transfer in the balance of payments account of a country?
a. Transportation costs involved in traveling from a foreign country to the domestic country b. A foreign worker in the domestic country sending money to his home country c. Compensation earned by foreign workers in the domestic country d. Royalties paid to residents working in a foreign country e. Income paid on foreign-owned investments in the domestic country
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.