Author Question: If Norway's labor and capital markets are highly correlated with those of its euro zone neighbors ... (Read 34 times)

madam-professor · **on:** Jun 30, 2018

If Norway's labor and capital markets are highly correlated with those of its euro zone neighbors

A) unemployed workers can easily move abroad to find work and domestic capital can be shifted to more profitable uses in other countries.
B) unemployed workers cannot easily move abroad to find work and domestic capital cannot be shifted to more profitable uses in other countries.
C) while unemployed workers can easily move abroad to find work, domestic capital cannot be shifted to more profitable uses in other countries.
D) while capital can easily move abroad to be put to a more profitable use, unemployed workers cannot easily move abroad to find work.
E) unemployment will rise, thanks to competition from foreign labor.

Question 2

Since Norway has close trading links with the euro zone

A) a small reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly.
B) a small reduction in its price will lead to a decrease in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly.
C) a small reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is small relative to Norway's output. Thus, full employment can be restored fairly quickly.
D) a big reduction in its price will lead to an increase in euro zone demand for Norwegian goods that is large relative to Norway's output. Thus, full employment can be restored fairly quickly.
E) a big reduction in its price will lead to a decrease in euro zone demand for Norwegian goods that is small relative to Norway's output. Thus, full employment can be restored fairly quickly.