If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for
A) unskilled labor will rise and skilled labor will fall.
B) skilled labor will rise and unskilled labor will fall.
C) both skilled and unskilled labor will rise proportionately.
D) both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

Question

Quizplus · Accepted Answer

As the U.S. expands trade with countries where unskilled labor is cheap, it will likely import goods that require unskilled labor, reducing domestic demand for unskilled labor. Conversely, demand for skilled labor may rise as the U.S. focuses on industries requiring skilled labor.

If Unskilled Labor Is Relatively Plentiful and Cheap in Many