Question

Without productivity growth, in the long run what are the true statements for the effect of...

Without productivity growth, in the long run what are the true statements for the effect of labor migration? Select one or more: a. The outputs of production increase in the sector using labor intensively. b. The outputs of production increase in the sector using capital intensively. c. There is a shift of world resource toward the high-income countries. d. There is a clear gains to owners of capital versus labor. e. There is a clear gains to labor versus owners of capital.

Homework Answers

Answer #1

Option A, B.

  • With out any productivity growth, In the long run the outputs of production increases in the sector using both the labour and capital intensively.
  • The migration is the most important driver of development and productivity growth of a country.
  • It leads to an increase in the output of labour intensive goods and a decrease in the output of capital intensive goods in the receiving country.
  • But in the long run, the immigration does not show much changes in the productivity growth as in the short run.
  • Hence in the absence of productivity growth, outputs of both the labour and capital intensive goods increase.
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