In the Two-Country Model of International Labor Mobility

question 45

Multiple Choice

In the two-country model of international labor mobility

• A) the long-run equilibrium assumes that desired and actual migration are equal.
• B) the long-run equilibrium assumes that desired migration exceeds actual migration.
• C) the long-run equilibrium assumes that actual migration exceeds desired migration.
• D) the long-run equilibrium assumes countries' policies place significant restrictions on migration.
• E) the long-run equilibrium is the result of a divergence of the real wages in the two countries.

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Definitions:

Transaction Costs

Expenses incurred in making an economic exchange, including search, bargaining, and enforcement of contracts.

Volume Of Trade

The total quantity of shares or contracts traded for a specified financial instrument or market within a specified period.

Gains From Trade

The increase in utility or welfare that countries or individuals obtain by engaging in voluntary exchange of goods and services.

Price Differential

The difference in price between two related goods, markets, or levels of supply chain.