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 demand curve for labor in the U.S. decreases, and the demand curve in the foreign country will increase.
B) The demand curve for labor in the U.S. increases, and the demand curve in the foreign country will decrease.
C) The demand curve for labor in the U.S. decreases, and the demand curve in the foreign country will decrease.
D) The demand curve for labor in the U.S. increases, and the demand curve in the foreign country will increase.
Ans: A) The demand curve for labor in the U.S. decreases, and the demand curve in the foreign country will increase.
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