One of the common arguments against "sweatshops" in developing countries is that wages that the workers are being paid are too low. Commentators often use dollar comparisons to show that, compared to U.S
standards, "sweatshop" workers are paid unfairly low wages. Use what you have read about the supply of labor to examine this argument.
Workers in factories in developing countries are usually willing to accept the wage that is being paid as it is better than their next best alternative. Their next best alternative could be unemployment or working at a lower-paying job. While this does not justify objectionable working conditions or violations of labor laws, the wages that they are paid could be a reflection of the lack of other opportunities in these countries.
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An increase in consumption, investment, or net exports caused by a decrease in government purchases is known as
A) crowding in. B) a closed economy. C) crowding out. D) demand-side effects.
The average variable cost curve shifts downward if
A) there is a decrease in fixed costs. B) there is a technological advance. C) the cost of a variable input increases. D) the price of output decreases.
In the long run ________
A) the amount of output an economy can produce is determined by real variables like capital, labor and technological advances B) aggregate supply is fixed at the potential level of output C) there is enough time for prices to fully adjust so the classical dichotomy holds D) all of the above E) none of the above
Advocates of active stabilization policies, in defense of their views, argue that
a. stabilization is less necessary than is commonly advocated by monetarists. b. discretionary policy in not necessary because automatic stabilizers are sufficient. c. perfect stabilization is not possible, but moderate improvements in economic performance are possible, such as the response to the events of September 11, 2001. d. All of the above are correct.