Trade tends to:
A) decrease the wages of high-productivity countries.
B) decrease the wages of low-productivity countries.
C) decrease the wages of both high- and low-productivity countries.
D) increase the wages of both high- and low-productivity countries.

Question

Quizplus · Accepted Answer

Trade allows countries to specialize in the production of goods and services in which they have a comparative advantage. This tends to increase productivity and efficiency, leading to higher wages for workers in both high- and low-productivity countries. Additionally, trade can increase the demand for goods and services, which can lead to the creation of more jobs and higher wages. Therefore, trade has the potential to benefit workers in both high- and low-productivity countries.

Trade Tends To