Question

"​​​​​​​ There are two countries, indexed by H and F , that can trade in consumption and capital, but not labor. The production functions for the one consumption good in this ec"

Answer 1

Trade can have income distribution effects on industries and jobs in different countries.

Step-by-step explanation:

Trade can have income distribution effects on industries and jobs in different countries. In the example given, if Germany sells house paint to the Czech Republic and the Czech Republic sells alarm clocks to Germany, it would likely increase jobs and wages in the paint industry in Germany and the alarm clock industry in the Czech Republic. To prevent an increase in total unemployment in both countries, there would need to be balanced trade or adjustments in other sectors to absorb any potential job losses.