Final answer:
Supporters of globalization argue that NAFTA and GATT increase US competitiveness in world markets by applying comparative advantage and increasing productivity, potentially raising standards of living and wages in advantaged industries. Option (b) It increases US competitiveness in world markets is the correct answer.
Step-by-step explanation:
Supporters of globalization claim that agreements like the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) have a positive effect by increasing US competitiveness in world markets. This belief is grounded in the principle that free trade and the application of comparative advantage lead to higher productivity, which in turn raises the standard of living by improving overall economic efficiency. As such, globalization facilitates a shift in jobs towards industries in which countries have a comparative advantage, theoretically increasing wages in those sectors.
However, it's essential to consider the mixed effects of this, as the wages for high-skilled, high-wage workers may increase due to expanding markets for advanced products. In contrast, low-skilled workers could see their wages decrease as they compete with a global workforce. Nonetheless, one of the positive claims of globalization supporters is that it strengthens a country's economic position internationally, and hence the correct option is b. It increases US competitiveness in world markets.