Final answer:
The change in relative price levels due to imports can affect real wages, potentially decreasing them for workers in sectors competing with capital-intensive imports. Workers in labor-intensive sectors may see relative real wage stability or increases unless competition forces prices down.
Step-by-step explanation:
When the price level changes in one country relative to others, it impacts the real wages of workers. If a foreign nation faces a lower relative price for its imported capital-intensive good (Qc), they will import Qc, assuming that Qc is capital-intensive and Qf is labor-intensive. Due to the international price effect, this scenario typically causes the real wages in the importing country to change.
Regarding the imports that are capital-intensive, if the prices of those goods decrease, it would likely lead to a reduction in the relative price of capital. This might result in lower payments to capital in terms of goods. Conversely, if labor-intensive goods' prices remain higher, the real wage of labor in terms of those goods could increase, assuming demand remains the same. However, the real wages of workers could decrease if low-priced imports force domestic producers to cut costs, potentially by reducing wages, to remain competitive.
Therefore, real wages in terms of the capital-intensive imported good could decrease for the workers involved in producing similar goods domestically. At the same time, real wages in terms of the labor-intensive good (Qf) might remain the same or increase if domestic businesses have some market power to keep prices above the competitive level. Nonetheless, if trade barriers are low and the market is highly competitive, the pressure to reduce prices might result in a decrease in real wages in terms of both goods.