In the Krugman model, when a country is opened to international trade, the total output of each firm __________ and the real wage of workers in the country __________.

Question

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According to the Krugman model, when a country is opened to international trade, the total output of each firm increases due to access to larger markets and specialization of production. As the overall production and productivity of the country increases, the demand for labor also increases, leading to an increase in the real wage of workers in the country. Therefore, both the total output of each firm and the real wage of workers in the country increase.

In the Krugman Model, When a Country Is Opened to International