Trade causes wages in countries with high productivity to increase and wages in countries with low productivity to decrease.
Answer the following statement(s) true (T) or false (F)
Ans: False.
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On the Lorenz curve, the vertical axis measures ______, and the horizontal axis measures ______.
a. cumulative percentage of income; cumulative percentage of households b. cumulative percentage of households; cumulative percentage of income c. cumulative national income; cumulative national debt d. cumulative national debt; cumulative national income
Why is fiscal policy less effective in an open economy than in a closed economy?
A. Expansionary fiscal policy raises demand for imports, which reduces aggregate demand. B. Expansionary fiscal policy raises interest rates, which raises the value of the currency, and reduces aggregate demand. C. Expansionary fiscal policy raises the value of the currency, which reduces demand for exports. D. Expansionary fiscal policy has all the above effects.