When a Country's Labor Market Is in Equilibrium in the Specific

question 24

Multiple Choice

When a country's labor market is in equilibrium in the specific factors model,the wage rate

• A) will be the same in both sectors.
• B) will be higher in the export-competing sector.
• C) will be higher in the import-competing sector.
• D) will be higher in the sector where product price is higher.
• E) will be higher in the sector where product price is lower.

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Definitions:

Reduced Government Spending

A situation where the government decreases its expenditure in various sectors to manage its budget, often affecting public services and investments.

Expansionary Monetary Policy

Government actions to increase the money supply in an effort to cut the cost of borrowing, which encourages business decision makers to make new investments, in turn stimulating employment and economic growth.

Money Supply

The total amount of monetary assets available in an economy at a specific time.

Cost of Borrowing

The total expenses that a borrower incurs to take out a loan, including interest payments, fees, and any other charges.