Explain how the opening of trade can lead to an increase in money wages in a capitalabundant country if capital is immobile between sectors. Does this mean that labor is necessarily beter off with trade
Opening for trade leads the country to raise the country production in the economy. This will lead the firms and workers in those firms to work more and have a comparative advantage of the trade. When trade is increasing it will lead the wages in the country to increase due to demand for goods in other countries.
When country which is capital abundant but the capital is immobile between sector there will be only development in those few sectors and only those sectors participate in trade. So country is trying to produce goods and services in those particular sector to have comparative advantage of the trade as they can produce goods in those sectors at low opportunity cost.
So when the trade in going on workers who work and produce more which be the choice for employers which increases the demand for labour in market thus increasing wages. So labour are been necessarily better off with trade.
Explain how the opening of trade can lead to an increase in money wages in a...
Consider a 2x3 specific-factors model, with all associated assumptions, where HOME is a small country and has two sectors, (1) light manufactured goods and (2) industrial goods, and three factors, (i) capital (which is mobile between sectors), (ii) unskilled labor (which is specific to light manufactures) and (iii) skilled labor (which is specific to industrial goods). (a) If the unskilled laborers express a strong preference against free trade, what does this suggest about HOME’s comparative advantage? Explain. (b) If, as...
1 (15 points). Consider a 2x3 specific-factors model, with al l associated assumptions, where Home is a small country and has two sectors, (G) light manufactur is specific to light manufacturers) and (ii) skilled labor (which is specific to (a) If the unskilled laborers actors, () capital (which is mobile between sectors), () unskilled labor (which industrial goods). express a strong preference against free trade, what does this suggest about Home's comparative advantage? Explain. (b) If, as a result what...
1. Do you agree or disagree with the following statements a. Balanced trade is the difference between exports and imports b. If country A can out produce country B, then country A has no reason to trade c. Every country in the world experiences free trade d. There is no connection between Foreign direct investment and trade flows e. An accurate way to measure imports is to assign the value of a final good 2. Trade distortion effects increase estimates...
In the two-sector (manufacturing and agriculture) specific-factors model, an increase in the price of the manufactured good will cause: A) a decrease in nominal wages in both the agricultural and manufacturing sectors. B) an increase in real wages in both the agricultural and manufacturing sectors. C) an increase in both nominal and real wages in both the agricultural and manufacturing sectors. D) an increase in nominal wages in both the agricultural and manufacturing sectors. Which statement below is correct? A)...
51. The Stolper-Samuelson theorem suggests that, when a country is opened to international trade, the real income of the country's abundant factor of production will and the real income of the country's scarce factor of production a. rise; also will rise b. rise; wil fall c. fall; will rise d. fall; also will fall 52 In the "specific-factors" model where capital in each sector is fixed but labor can move freely between the two sectors, the opening of the country...
Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation [10 MARKS].
Suppose Canada has just signed a new free trade agreement with Bangladesh. Wages of software designers in Bangladesh are significantly lower than those in Canada. Does this mean that Canada will necessarily lose jobs in software design to Bangladesh? Explain with reference to labour demand.
Question one a Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation (10 MARKS]. Question one B The per capita income in Ghana and Nigeria for the year 2019 are 4605 and 5927 dollars respectively. Discuss the flaws of using these figures to suggests that the welfare of people living in Nigeria is better than those living in Ghana. [10 MARKS]
One of the principles of economics is that trade can make everyone better off. Explain why this might be so, grounding your discussion in the economic principles. Conversely, do you think trade necessarily has to make everyone better off? Why or why not?
12. Sectoral shifts A. lead to wage rigidity B. explain the payment of efficiency wages C. depend on the level of the minimum wage D. make frictional employment inevitable 13. The Solow growth model describes A. how output is determined at a point in time B. how output is determined with fixed amounts of capital and labor C. how saving, population growth, and technological change affect output over time D. the static allocation, production, and distribution of the economy's output...