In the two-country model of international labor mobility
A) the long-run equilibrium assumes countries' policies place significant restrictions on migration.
B) the long-run equilibrium assumes that desired migration exceeds actual migration.
C) the long-run equilibrium assumes that actual migration exceeds desired migration.
D) the long-run equilibrium is the result of a divergence of the real wages in the two countries.
E) the long-run equilibrium assumes that desired and actual migration are equal.

Question

Quizplus · Accepted Answer

In the long-run equilibrium of the two-country model of international labor mobility, desired and actual migration are assumed to be equal. This means that labor flows freely between the two countries until both countries reach their desired level of migration. In this equilibrium, the real wages in the two countries will be equalized, leading to an efficient allocation of labor resources. This assumes that there are no significant policy restrictions on migration in either country.

In the Two-Country Model of International Labor Mobility