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 receive an even lower wage.
C) Specialization and trade raise wages in both countries party to the trade.
D) Specialization and trade raise productivity but not wages.

Question

Quizplus · Accepted Answer

Specialization and trade allow countries to specialize in producing goods and services that they are relatively good at, and then trade them with other countries. This results in higher overall productivity and increased output, which in turn leads to higher wages for workers in both countries. Therefore, statement C is true. Statements A, B, and D are false.

Which of the Following Statements Is TRUE