Assuming a Country Has a Constant Returns to Scale Cobb-Douglas

question 10

Multiple Choice

Assuming a country has a constant returns to scale Cobb-Douglas production function, what effect will immigration have on native labor that has a high degree of substitutability with the immigrant labor?

• A)Immigration has no long-run effect on native wages.
• B)Immigration lowers native wages in the long run.
• C)Immigration raises the labor-capital ratio in the long run.
• D)Immigration has no short-run effect on native wages.
• E)Immigration has a negative effect on total employment in the short run.

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