What are some complications and modifications of the simple model of immigration and its conclusions about wage rates, domestic output, and business incomes in a poorer nation and a richer nation?

What will be an ideal response?


First, there is a cost to migration for workers that will reduce the world gain in output. Second, remittances from the immigrants to their home nation reduce the gains for the richer nation. If immigrant workers remit some of their increased wages to relatives in the poorer nation, then some gain for the domestic economy is lost. The return of immigrants to the poorer nation (back flows) also alters gains and losses. Third, many immigrant workers are complementary resources rather than substitute resources, so not all domestic workers will see their wages fall if immigrant workers are complements. Fourth, there can be long-run effects on capital goods that may raise or lower productivity and wage rates. Fifth, the model assumes full employment in both nations. If there is unemployment or underemployment in the poorer nation it can increase domestic output when the surplus workers emigrate. Sixth, immigration can affect tax revenues and government spending. If immigrants take advantage of welfare benefits in the richer nation, immigration imposes an additional cost to the richer nation.

Economics

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The Phillips curve will shift up with ________ or ________

A) a positive supply shock; an increase in expected inflation B) a positive supply shock; a decrease in expected inflation C) a negative supply shock; an increase in expected inflation D) a negative supply shock; a decrease in expected inflation

Economics

An analysis of production possibilities curves indicates that the reason why underdeveloped nations have difficulties increasing their economic growth rates is because:

a. low population growth rates mean fewer workers to produce food and other necessities. b. their production possibilities curves shift in when resources are increased. c. their production possibilities curves are positively sloped, unlike those in more developed economies. d. they must cut back their already meager consumption levels to increase capital production. e. the opportunity cost of shifting resources from consumption goods to capital goods is relatively low.

Economics

Which of the following sentences about entrepreneurs stands true?

a. They tend to be risk-averse individuals. b. They are more frequently found in societies that support social conformity. c. They help achieve technological progress. d. They are more frequently found in the local population of the developing countries. e. They usually belong to the traditional elite class.

Economics

In the long-run equilibrium of a competitive market, the number of firms in the market adjusts until the market demand is satisfied at a price equal to the minimum of

a. average fixed cost for the marginal firm. b. marginal cost of the marginal firm. c. average total cost of the marginal firm. d. average variable cost of the marginal firm.

Economics