Some economists hypothesize that international trade has altered the relative demand for skilled and unskilled labor,increasing the gap in earnings between these two groups.Which of the following statements best describes this hypothesis?

Question

Quizplus · Accepted Answer

This hypothesis suggests that international trade leads to the importation of goods produced with unskilled labor from countries where such labor is plentiful and cheap, while at the same time leading to the exportation of goods produced with skilled labor from countries where such labor is in greater demand. This has the effect of increasing the wage gap between those with higher levels of skill and education and those with lower levels. Therefore, choice B best describes this hypothesis.

Some Economists Hypothesize That International Trade Has Altered the Relative