What are the short-run economic effects when U.S. firms substitute labor outside of the U.S. for labor inside the U.S.?
A) The wage rate in the U.S. will remain the same, and the wage rate in the foreign country will decrease.
B) The wage rate in the U.S. will increase, and the wage rate in the foreign country will decrease.
C) The wage rate in the U.S. will decrease, and the wage rate in the foreign country will decrease.
D) The wage rate in the U.S. will decrease, and the wage rate in the foreign country will increase.
Answer: D
Economics
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