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The following is a list of statements relating to the impact of free trade on wages and employment. Indicate whether the statement is TRUE or FALSE by dragging and dropping the appropriate term into the boxes provided.

(T or F) 1. A trade agreement reducing trade barriers between the US and a low-income/low-wage economy would lead to an increase in the unemployment rates in the US.

(T or F) 2.Free trade does not generally benefit those employed in high-skill, high wage jobs.

(T or F) 3.Free trade generally increases the wage rates and productivity across an economy.

(T or F) 4.A trade agreement reducing trade barriers between the US and a low-income/low-wage economy would reduce employment in low wage service industry jobs in the US.

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Anne Gillian Duero
Anne Gillian DueroLv10
28 Sep 2019

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Related questions

Please answer all of the following multiple choice questions... Thankyou!

1. International officials and business leaders have gathered to discuss free-trade policies. Outside their summit, protesters shout, "People before profit." These activists most likely align with which economic theory? (5 points)
Adam Smith's unregulated supply and demand
John Maynard Keynes's limited government intervention
John Maynard Keynes's mixed market forces
Karl Marx's collapse of capitalism
2. Marx would most likely support a plan for (5 points)
government ownership of most production
creating a worldwide free trade agreement
eliminating income taxes on the wealthy
income taxes based on ability to pay
3. Supply and demand determines prices levels for goods and services in a (5 points)
market economy
traditional economy
demand economy
command economy
4. Which of the following describes a developed/advanced nation? (5 points)
A high gross domestic product and a low per capita income
A high Human Development Index and a high per capita income
A low gross domestic product and a low standard of living
A low Human Development Index and a high standard of living
5. Development may be inhibited in command economies because (5 points)
government controls productivity
businesses focus on subsistence agriculture
businesses prevent specialization
individuals prohibit industrialization
6. Which of the following economic goals focuses on funding technological advances in production? (5 points)
Efficiency
Equity
Freedom
Security
7. The government institutes a new job-training program to prepare economically disadvantaged citizens for higher-paying, technologically advanced jobs. This action benefits the goal of equity by (5 points)
ensuring workers are more productive
helping minimize the education gap
raising government spending
reducing unemployment

31. A country's tax system influences the attractiveness of investing in that country and affects the relative level of profitability for an MNC.

a. True

b. False

32. Points inside a production possibilities frontier represent

a. unattainable production combinations

b. efficiency

c. situations where supply exceeds demand

d. unemployment of resources

33. Firms in a high-wage nation like the U.S. can compete effectively with imports from low-wage nations if

a. the U.S. reduces tariffs on imports

b. low-wage nations impose tariffs on U.S. made goods

c. labor productivity is higher in the low-wage nation

d. labor productivity is higher in the U.S.

34. Assume that production in the United States is valued at $100,000. National income is therefore $100,000. Of their income, workers save $2000, pay $6,000 in taxes, spend $89,000 on consumer goods, and spend $2000 on imports. Businesses spend $5,000 in new investment spending. And, foreigners spend $1000 on exports. To avoid any problems of inflation or unemployment, the government should have a budget deficit or surplus of:

a. $2,000 surplus

b. $1,000 deficit

c. $2,000 deficit

d. $1000 surplus

e. $0 deficit

35. Autarky means-----------------------------------------------------------------

a. the absence of government

b. lack of agriculture

c. self-sufficient, in the absence of international trade

d. short of exchange rates

36. The more people there are----------------------, the less the public as a whole will spend on goods and services.

a. unemployed

b. underemployed

c. employed

d. as discouraged workers

37, Which of the following theories holds that countries will produce and export products that use large amounts of production factors that they have in abundance?

a. Mercantilism

b. The theory of absolute advantage

c. The factor endowment theory

d. None of the above.

38. Suppose that a consumer has a marginal propensity to consume of 0.79. If this consumer earns an extra $1220, her saving would be expected to increase by-----------------------------

39. Many countries in Asia, Africa, and South America-----------------------

a. Are developing countries

b. Are industrialized nations

c. Have a high demand for nonessential products

d. Do not trade

40. Which two of the following are regarded as the main aims of the World Trade Organization (WTO)?

a) To eliminate discrimination in world trade

b) To provide financial assistance to countries with debt

c) To reduce tariff barriers

d) To make infant industry protection illegal

e) To help give preferences to smaller economies

b) and e) a) and c) a) and d) c) and e) b) and d)

41. Last year Sophia's nominal income increased by 12% while the price level rose by 5.5%. Consequently, Sophia's real income:

a. rose by approximately 7%

b. fell by approximately 1%

c. rose by approximately 2%

d. ------------------------------------

42. Consumer surplus

a. is always positive.

b. for a particular unit of consumption is computed by taking the difference between quantity demand and quantity supplied.

c. for all units consumed is the area below demand and below market price over all the units consumed.

d. added to producer surplus provides a measure of the net gain to society from the production and consumption of the good.

43. A decline in Real GDP for six or more consecutive months is called-------------------------------

a. A trough

b. A recession

c. An expansion

d. A recovery

44. What do we call the situation where capital grows faster than the labor force?

a. economic growth

b. technological change

c. productivity growth

d. capital deepening

45. The terms of trade are-------------------------------------------

a. the cost of transportation between countries

b. the ratio of wages in two countries

c. the terms which are used in the trade negotiations

d. the rate at which two products can be exchanged

Question 1:

Economic discrimination puts the economy inside its production possibilities curve because discrimination:

promotes present consumption rather than production of capital goods.
often causes inflation, which reduces the nation's real output.
redistributes income from low-paid to high-paid persons.
arbitrarily blocks women and certain minorities from higher-productivity, higher wage jobs and thus keeps the economy from producing its maximum output.

Question 2:

Economic discrimination:

affects the distribution of domestic output and income, but not its total size.
places the economy at some point inside of its production possibilities curve.
affects the total size of domestic output and income, but not its distribution.
is shown as some point outside of an economy's production possibilities curve.

Question 3:

Labor market discrimination creates a:

larger domestic output but no redistribution.
redistribution of a smaller domestic output.
redistribution of a larger domestic output.
smaller domestic output but no redistribution.

Question 4:

An increase in the collective discrimination coefficients of employers will:

reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio.
reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio.
increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.
increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio.

Question 5:

A reduction in the collective discrimination coefficients of employers will:

reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio.
reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio.
increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.
increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio.

Question 6:

In the taste-for-discrimination model:

women and minorities are confined to a limited number of occupations.
white employers behave as if employing African-American workers adds to costs.
individual workers are judged by the characteristics of the groups to which they belong.
prejudiced white employers will never hire African-American workers.

Question 7:

Which of the following employers is the most prejudiced? Employer:

C whose d is $4.
A whose d is $0.
D whose d is $6.
B whose d is $2.

Question 8:

An implication of the taste-for-discrimination model is that:

other things equal, nondiscriminating firms will have lower production costs than discriminating firms.
discrimination will move a firm along its declining average total cost curve.
discrimination can lower a firm's production costs.
other things equal, discriminating firms will have lower production costs than nondiscriminating firms.

Question 9:

An employer is prejudiced, prefers to hire white rather than African-American workers, and is willing to pay higher wages to obtain white workers. This illustrates:

the crowding model.
statistical discrimination.
the taste-for-discrimination model.
reverse discrimination.

Question 10:

Empirical studies generally find that the estimated discrimination coefficient is larger in southern versus northern states. True or False: presuming that the wage differential is due to employer discrimination, this necessarily implies that there are more discriminating employers in the South than there are in the North.

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