Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in agricultural output. Will workers be better or worse off following the opening of trade with other countries?
a. Workers will be better off because the nominal wage increases.
b. Workers will be worse off because the nominal wage decreases.
c. Workers may be better off or worse off because the real wage in terms of the agricultural good rises and the real wage in terms of the manufactured good falls.
d. Workers may be better off or worse off because the real wage in terms of the agricultural good falls and the real wage in terms of the manufactured good rises.
Ans: d. Workers may be better off or worse off because the real wage in terms of the agricultural good falls and the real wage in terms of the manufactured good rises.
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If taxes are cut, there is
A) an increase in aggregate demand and the AD curve shifts rightward. B) a decrease in aggregate demand and the AD curve shifts leftward. C) an increase in the quantity of real GDP demanded and a movement up along the AD curve. D) a decrease in the quantity of real GDP demanded and a movement down along the AD curve. E) no change in aggregate demand, only a change in potential GDP.
The table above shows the marginal costs and marginal benefits of college education. If 8 million students are enrolled, the marginal external benefit is
A) zero. B) $4,000. C) $5,000. D) $7,000.
During what period of time did the United States most consistently adhere to the gold standard?
A) from 1914 until 1929 B) from the eighteenth century until the nineteenth century C) from 1944 until 1980 D) from the nineteenth century until the 1930s
The difference between a capital good and a consumer good depends on
a. the purpose for which it is used. b. how it was produced. c. when it was produced. d. how quickly it is used up.