The evidence cited in the chapter using the examples of the East Asia New Industrializing Countries suggests that as international productivities converge, so do international wage levels
Why do you suppose this happened for the East Asian NICs? In light of your answer, what do you think is likely to happen to the relative wages (relative to those in the United States) of China in the coming decade? Explain your reasoning.
Following the logic of the Ricardian model of comparative advantage, the East Asian countries played to their respective comparative advantages. This allowed the world demand to provide excess demands for their relatively abundant labor, which in turn tended to raise these wages. If China follows the same pattern, their wages levels should also be expected over time to converge to those in their industrialized country markets.
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A) larger the value of U.S. imports, the smaller is the quantity of foreign currency demanded. B) larger the value of U.S. imports, the greater is the quantity of U.S. dollars supplied to the foreign exchange market. C) lower the exchange rate, the cheaper are foreign-produced goods and services. D) higher the exchange rate, the greater is the expected profit from selling dollars.
Persuasive advertising is used to
A) induce a consumer to try a product and discover a previously unknown taste for it. B) promote only used goods. C) sell to an established clientele. D) cut costs.