1A) In theory, we would expect immigration to result in Lower wages and lower GD
ID: 1136039 • Letter: 1
Question
1A) In theory, we would expect immigration to result in
Lower wages and lower GDP
Lower wages and higher GDP
Higher wages and lower GDP
Higher wages and higher GDP
No impact on wages of GDP
1B) In general Globalization has resulted in
Increased global inequality
Increased inequality in poorer nations
Increased inequality in richer nations
Decreased inequality in richer nations
No impact on inequality
1C) Which of the following is not alleged to be a problem associated with globalization?
environmental degradation
inefficient production
loss of national sovereignty
loss of job security
inequitable income redistribution
1D) According to the permanent income hypothesis,
consumption responds only to changes in current income
consumption responds more to expected future changes in income than to current income
consumption responds more to temporary changes in income than to permanent changes
consumption responds more to lifetime income than to current income
e. consumption is a function of previous income
1E) Which of the following would most likely discourage investment?
an increase in the selling price of a firm’s output
a reduction in the selling price of corporate stock
an increase in bond prices
a reduction in the rate of inflation
e. an increase in the optimal capital stock
a.Lower wages and lower GDP
b.Lower wages and higher GDP
c.Higher wages and lower GDP
d.Higher wages and higher GDP
e.No impact on wages of GDP
Explanation / Answer
1A) Option b. In theory as the immigration increases the supply of labors increases which reduces the wage rate. With the cheaper labor the GDP too increases
1B) Option b. Because of globalization the poorer nations are not able to compete with rich nations which has resulted in increased inequality in poorer nations
1C) Option b. With the increase in competition the productivity too increases
1D) Option b. According to the hypothesis, people would consume more only if the expected future income is more than the current income
1E) Option b. price of a corporate stock decreases when the demand for the stock decreases
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