If a nation has "cheap labor,"
A)it can still benefit from trade.
B)other nations can still compete with it.
C)it cannot have a comparative advantage in everything.
D)All of the above are true.

Question

Quizplus · Accepted Answer

A) Cheap labor can make the nation's exports competitive in global markets, allowing it to benefit from trade.

B) Other nations can still compete with it because the availability of cheap labor is not the only factor that affects competitiveness.

C) Even with cheap labor, a nation cannot have a comparative advantage in everything. Comparative advantage is determined by a combination of a nation's resources, technology, and skill level, not just labor costs.

If a Nation Has "Cheap Labor