Provide three reasons why Mexico generally opposes stronger border enforcement by the United States
What will be an ideal response?
First, a low-wage nation such as Mexico would benefit from the emigration of its workers to the United States in the form of higher domestic real wages. Second, immigrants tend to send large transfers of money to their family members in their home country. These remittances help redistribute the net gain from migration between Mexico and the United States. Finally, some of the Mexican emigrants are unemployed workers who use many of the services provided by the Mexican government but contribute little to its domestic output. The flow of these workers to the United States reduces government spending in Mexico while doing little to nothing to government revenue and thus is preferred by the Mexican government.
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Which of the following is TRUE?
A) Adam Smith proposed the theory of comparative advantage as the basis for trade in The Wealth of Nations. B) David Ricardo proposed the theory of absolute advantage as the basis for trade. C) Absolute advantage is based on comparing the opportunity costs of trading partners. D) The Ricardian model assumes labor is perfectly mobile.
With respect to an auction market,
a. labor and output are assumed to be traded in markets that are not always in equilibrium. b. all participants make decisions based on announced nominal wage rates. c. all participants make decisions based on announced product prices. d. All of the above e. None of the above