Let Us Define the Real Wage as the Purchasing Power

question 23

Multiple Choice

Let us define the real wage as the purchasing power of one hour of labor.In the Ricardian 2X2 model,if two countries under autarky engage in trade then

• A) the real wage will not be affected since this is a financial variable.
• B) the real wage will increase only if a country attains full specialization.
• C) the real wage will increase in one country only if it decreases in the other.
• D) the real wage will rise in both countries.
• E) the real wage will fall under pressure of international competition.

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Definitions:

Drive Theory

A theory that suggests motivation is based on the desire to reduce internal tension caused by unmet biological needs.

Homeostatic

Relating to or denoting the self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.

Sensitivity

The quality or condition of being sensitive; the ability to perceive or feel emotions or physical stimuli.

Emotional Tone

Emotional tone refers to the overall mood or emotional quality of a communication, situation, or experience, influencing how it is perceived.