In the long run (the HO model), immigration will lead to:
a. an increase in the price of both the laborintensive and the capitalintensive goods in the receiving country.
b. an increase in the price of the laborintensive good and a decrease in the price of the capitalintensive good in the receiving country.
c. a decrease in the price of both the laborintensive and the capitalintensive goods in the receiving country.
d. no change in the price of either the laborintensive or the capitalintensive good in the receiving country
Answer: d. no change in the price of either the laborintensive or the capitalintensive good in the receiving country
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The real exchange rate is equal to the ________
A) nominal rate of exchange plus the domestic level of prices B) the nominal exchange rate minus the relevant foreign price level C) nominal exchange rate divided by the domestic plus foreign price levels D) nominal exchange rate times the domestic price level divided by the foreign price level
Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota
Indicate whether the statement is true or false