Suppose That the Wage Rate in Country a Is Three

question 28

Multiple Choice

Suppose that the wage rate in country A is three times the wage rate in country B. In this situation, in the context of the Classical/Ricardo trade model, country A would be able to export goods to country B in industries where

• A) A's workers were less than one-third as productive as B's workers.
• B) A's workers were equally as productive as B's workers.
• C) A's workers were less than three times as productive as B's workers.
• D) B's workers were less than one-third as productive as A's workers.

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Definitions:

Unemployment Figures

The statistics that represent the percentage of the labor force that is not employed but actively seeking employment.

Aggregate Demand

The sum of needs for all goods and services in an economy, measured at a collective price level within a set time interval.

Inflation

The velocity at which the universal price point for goods and services escalates, reducing the ability to make purchases.

Frictionally Unemployed

Individuals who are temporarily out of work while transitioning from one job to another.