Author Question: The excess of total credits over total debits in the current and private capital accounts is called ... (Read 82 times)

hubes95 · **on:** Jun 30, 2018

The excess of total credits over total debits in the current and private capital accounts is called the

A) BOP deficit.
B) BOP surplus.
C) official settlements account surplus.
D) official settlements account deficit.

Question 2

Describe the controversy surrounding the HO model and the widening of the American income gap.

What will be an ideal response?

Ksanderson1296 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

C

Answer to Question 2

Over the past three decades, real wages in America paid to blue collar workers have only risen slightly whereas real wages paid to college graduates have risen significantly. Many pundits claim that this income gap has been widening because of international trade, particularly as the U.S. has increased trade with developing countries such as China. The HO model predicts that low-skilled wages should fall towards wage rates paid in developing countries.

Some economists have suggested that it is the rapid pace of technological change that has reduced the demand for low-skilled workers, leading to the reduced wages and employment levels in this sector. Other economists, such as Paul Krugman, suggest that trade is increasingly more responsible for expanding the income gap.