Final answer:
The statements in question a are true. Immigration benefits the home country through a larger workforce and overall gains, but it can harm workers. In question b, workers in high-wage countries are initially worse off, but in the long run, capital owners are harmed instead.
Step-by-step explanation:
The statements in question a are true. Immigration benefits the home country through a larger workforce and overall gains, but it can harm workers. However, in the case of the foreign country, it suffers losses as workers leave, reducing the number of employees available for firms and making the country worse off.
In question b, the statements are also true. In the short run, workers in high-wage countries are worse off when foreign workers immigrate, as their wages may be slightly lower. However, in the long run, this pattern is reversed and capital owners are harmed by immigration because it results in more labor being used in the labor-intensive sector and less in the capital-intensive one.
The impact of immigration on both the home and foreign countries' economies is complex and entails a mixture of benefits and challenges, making it uncertain whether the effects are predominantly positive or negative. Short-term effects on workers and capital owners may differ from long-term impacts due to economic adjustments over time.
The impact of immigration on the economy is multifaceted. For statement (a), it is uncertain whether the home country is benefitted by a larger workforce at the detriment of workers, as immigration can lead to a more dynamic economy through various channels such as larger markets and a diversified labor force. However, these gains may be offset by challenges such as lower wages for low-skilled workers and fiscal impacts on local governments. As for the effect on the foreign country, it is also uncertain since while the immediate loss of workers might harm some sectors, remittances and the potential for return migration with new skills and capital can benefit the economy in the long run.
Regarding statement (b), it is generally true that in the short run, low-skill workers in high-wage countries may experience wage suppression due to increased labor supply, while capital owners might benefit from lower labor costs leading to higher profits. In the long run, however, the effects are more complex and can potentially reverse. Increased labor might lead to an expansion in labor-intensive sectors, potentially diminishing returns to capital if capital does not grow at the same pace. Nevertheless, this outcome is highly dependent on various economic variables and, thus, makes the long-term effects uncertain.
The examination of these effects is further complicated by how well the immigrant population integrates and complements the native workforce, the flexibility of the economy to absorb the new workers, and the responses of local institutions to these changes.