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Is international trade likely to have about the same effect on everyone's wages?

a) True
b) False

1 Answer

3 votes

Final answer:

International trade affects wages differently across various industries, benefiting workers in competitive sectors and potentially harming those in industries facing import competition.

Step-by-step explanation:

The impact of international trade on wages is not the same for everyone. Increases in trade can shift jobs away from industries in which a country has a comparative disadvantage and toward those where it has an advantage. This reallocation of labor can lead to some industries facing stiffer competition from imports, potentially reducing wages in those sectors.

On the other hand, industries that are competitive on a global scale may see an increase in demand for their products, which can lead to higher wages for workers in those industries. The structure of the country's labor market and the speed at which it can adjust also play significant roles in how trade affects wages.

The final answer is False: International trade is unlikely to have the same effect on everyone's wages because it benefits some industries and workers while disadvantaging others.

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