Economic analysis indicates the net long-run effect of outsourcing for the United States is likely to be
A) an increased demand for labor due to economic growth.
B) a decreased in the demand for labor in the United States in the short run.
C) an increase in the supply of labor.
D) a decrease in the supply of labor.
Answer: A
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A government decision to privatize a sector of the economy formerly operated by the government is an example of ________ policy.
A. aggregation B. structural C. fiscal D. monetary
Suppose inflation is expected to be 5 percent next year, and you and your employer agree to a 6 percent increase in your nominal, or monetary, wage. If inflation turns out to be 5%, what is your nominal wage increase?
Governments prefer to avoid excessive current account surpluses because
A) the returns to domestic savings are more difficult to tax than those on assets abroad. B) an addition to the home capital stock may increase domestic unemployment and therefore lead to higher national income. C) foreign investment in one firm may have beneficial technological spillover effects on other foreign producers that the investing firm does not capture. D) an addition to the home capital stock may reduce domestic unemployment and therefore lead to higher national income. E) domestic savings increase with more investment abroad.
Explain why a price ceiling, when applied to a market, inevitably generates chronic excess demand for the good