In the Long Run, Which of the Following Will Occur

question 44

Multiple Choice

In the long run, which of the following will occur if the U.S. federal government eliminates restrictions on migration of Mexican workers to the United States?

• A) The United States' total K/L ratio will rise.
• B) Mexico's total K/L ratio will fall.
• C) Wages of American workers who compete with Mexican workers for jobs will rise.
• D) The returns to U.S. owners of capital will remain unchanged.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of the other.

¥134.68

This represents an amount in Japanese yen, a currency used in Japan.

10% More

Indicates an increase or addition of ten percent to a given number or value.

7% Less

A reduction by seven percent from a previous amount or value.