The Specific-Factors Model Predicts That, After Immigration, the Equilibrium Wage

question 137

Multiple Choice

The specific-factors model predicts that, after immigration, the equilibrium wage in both industries in the destination nation:

• A) will rise.
• B) will fall.
• C) will remain the same.
• D) cannot be determined with the information given.

Understand the differences between Keynesian and classical economic theories.

Recognize the concept of equilibrium GDP and its relation to full employment according to Keynes and the classicals.

Identify Say's Law and its significance in classical economics.

Explain the Keynesian critique of classical economics, specifically regarding savings, investment, and government intervention.

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Definitions:

Securities Taxes

Taxes levied on the earnings from stocks, bonds, or other investment assets.

Wealth Destruction

The process by which the value of an asset or investment decreases significantly, reducing overall wealth.

Wall Street

The financial district of New York City, symbolizing the financial markets and institutions of the United States.

Slums

Highly populated urban residential areas consisting mostly of closely packed, decrepit housing units in a situation of deteriorated or incomplete infrastructure.