If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for
a. unskilled labor will rise and skilled labor will fall.
b. skilled labor will rise and unskilled labor will fall.
c. both skilled and unskilled labor will rise proportionately.
d. both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.
B
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According to the U.S. balance of payments accounts in 2012, U.S. international borrowing is used for
A) private saving and public consumption. B) private and public investment. C) private consumption. D) private and public saving. E) government expenditure.
Which of the following is NOT a significant cost that a barter system imposes on an economy?
A) Many prices must be maintained for each good. B) Only agricultural goods may be traded. C) Specialization of labor is hindered. D) The costs arising from the problem of finding two people who each want what the other produces.
If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then
a. Sarah has a comparative advantage in shoemaking b. Daniel has a comparative advantage in shoemaking c. Sarah has an absolute and a comparative advantage in shoemaking d. Daniel has an absolute and a comparative advantage in shoemaking e. Sarah has an absolute advantage in shoemaking
What effect does a recession have on a country’s international trade?
What will be an ideal response?