In the past, presidential candidates have argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low. Which of the following is the best explanation of why few economists agree with this position?
A) Economists did not believe that any jobs would be lost in the United States.
B) Economists believed that the U.S. unemployment rate would rise.
C) Although economists agreed that in some areas the United States would lose jobs, they expected that the United States would gain jobs in other areas.
D) Although economists predicted that unemployment would rise, the increased profits of corporations would raise stock prices enough to compensate for the lost jobs.

Question

Quizplus · Accepted Answer

Economists generally believe in the principle of comparative advantage, which suggests that while some jobs may be lost due to free trade, other jobs will be created in sectors where the U.S. has a competitive advantage, leading to an overall positive effect on the economy.

In the Past, Presidential Candidates Have Argued That Free Trade