The Balassa-Samuelson Model Says That Wages and Prices in General

question 19

Multiple Choice

The Balassa-Samuelson model says that wages and prices in general are higher in higher-income nations because:

• A) they have more effective laws protecting their workers.
• B) the workers have a higher productivity level, which is reflected in prices of nontraded goods.
• C) there is less competition in these economies.
• D) taxes on business and for entitlement programs raise labor and other costs, making prices much higher.

---

Definitions:

Curve

A graphical representation of data points or a mathematical function on a plane, showing the relationship between two or more variables.

Normal Distribution

A chance distribution evenly balanced around the mean, revealing that instances close to the mean occur more frequently than those far from it.

Standard Deviations

A measure of the dispersion or variability within a set of data, indicating how much individual data points differ from the mean.

Mean

The average value of a set of numbers, calculated by dividing the sum of the numbers by the count of the numbers.