A Nation Whose Labor Market Is Highly Integrated with Other

question 84

Multiple Choice

A nation whose labor market is highly integrated with other nations in a currency union is more ______ to join because ______.

• A) unlikely; workers would suffer real wage declines if they have competition from foreign workers
• B) unlikely; firms would find it expensive to hire workers if they have to pay in the common currency
• C) likely; labor market integration means that when there are asymmetric demand shocks the adjustment can be eased by migration of workers
• D) likely; labor force rules and policies can be harmonized more easily

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Definitions:

Dividend Yield

A ratio demonstrating the yearly dividends a company distributes in relation to its share price.

Exercise Price

The price at which an option holder can buy or sell the underlying security.

Protective Put

An options strategy wherein an investor holds a long position in a stock and buys put options on that same stock to protect against the stock's decline in price.

T-bill Rate

The yield or interest rate paid to investors of U.S. Treasury bills, a short-term government security.