In the 2-factor, 2 good Heckscher-Ohlin model, an influx of workers from across the border would
A) move the point of production along the production possibility curve.
B) shift the production possibility curve outward, and increase the production of both goods.
C) shift the production possibility curve outward and decrease the production of the labor-intensive product.
D) shift the production possibility curve outward and decrease the production of the capital-intensive product.
E) shift the possibility curve outward and displace preexisting labor.
D
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Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. What will happen to the Canadian IS curve as a result of the leftward shift of the U.S. IS curve?
A) It will shift rightward. B) It will shift leftward. C) It will not change. D) The IS curve will show an increase.
If the actual price level is lower than the expected price level reflected in long-term contracts,
a. the actual rate of unemployment will be less than the natural rate of unemployment. b. the actual rate of unemployment will exceed the natural rate of unemployment. c. the natural rate of unemployment will rise. d. the natural rate of unemployment will fall.