Which of the following statements is TRUE?
A) Trade makes workers in high productivity countries less productive.
B) Trade causes workers in low-wage countries to receive an even lower wage.
C) Specialization and trade raise wages in both countries that are party to the trade.
D) Specialization and trade raise productivity but not wages.

Question

Quizplus · Accepted Answer

Specialization and trade allow each country to focus on producing the goods and services that they can produce most efficiently, leading to an increase in productivity. This increase in productivity results in higher wages for workers in both countries because they are able to produce more goods and services per hour worked. Therefore, statement C is true. Statements A and B are false, and statement D is partially true but does not address the impact of trade on wages.

Which of the Following Statements Is TRUE