Opening trade between a nation that has "cheap labor" and one that has "expensive labor" will
a. lower the standard of living in both countries.
b. raise the standard of living in both countries.
c. raise the standard of living in the "expensive labor" country and lower the standard of living in the "cheap labor" country.
d. raise the standard of living in the "cheap labor" country and lower the standard of living in the "expensive labor" country.
B
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Which of the following is TRUE of the portion of the net public debt held by foreign residents?
A) It will definitely be a benefit to current and future generations of U.S residents, because foreign residents have shown a willingness to lend to the U.S. government in exchange for rates of return significantly lower than they can receive elsewhere in the world. B) It will be a benefit to future generations of U.S. residents only if funds that the U.S. government obtains from borrowing are expended on projects with rates of return lower than the rates of interest that the government pays foreign residents C) It will definitely be a burden on current and future generations of U.S. residents who will have to pay interest on this portion of the debt, thereby transferring a portion of future U.S. incomes abroad. D) It will be a burden on future generations of U.S. residents only if funds that the U.S. government obtains from borrowing are expended on projects with rates of return lower than the rates of interest that the government pays foreign residents.
The difference between a Euroloan interest rate and Eurodeposit interest rate is called
A) net interest rate. B) the forward premium. C) net profit rate. D) the spread.