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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Dividends Paid

The sum of money paid by a company to its shareholders out of its profits or reserves.

Cash Flow

The aggregate circulation of cash and cash-like resources transitioning into and out of an enterprise.

Creditors

Individuals, banks, or other entities that lend money or extend credit to others, with the expectation of being repaid, often with interest.

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A financial metric that represents the net asset value of a company, calculated by subtracting total liabilities from total assets.