If the Wage Rate in the Agriculture Sector Is Lower

question 58

Multiple Choice

If the wage rate in the agriculture sector is lower than the manufacturing sector, then labor will migrate to the manufacturing sector. This will cause:

• A) both the wage and the marginal product of labor in the manufacturing sector to decrease.
• B) both the wage and the marginal product of labor in the agriculture sector to decrease.
• C) the nation to import more goods.
• D) There will be no effect on either sector.

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Definitions:

Board of Governors

The leading body of the Federal Reserve System, overseeing the Federal Reserve Banks and helping implement monetary policy.

U.S. Senate

One of the two chambers of the United States Congress, responsible for making and passing federal laws, where each state is represented by two senators.

Money Supply

The total quantity of money available in the economy at a specific time, including currency, coins, and balances held in checking and savings accounts.

Currency

A system of money in common use, especially in a nation, for facilitating the exchange of goods and services.