Which of the following is TRUE regarding trade and wages?
A)Trade can increase wages by increasing the productivity of labor.
B)Trade helps to equalize wages between high- and low- productivity countries.
C)Low-productivity nations have lower wages than high-productivity nations whether they trade or not.(True Answer )Correct
D)Trade directly increases productivity, which in turn increases wages.

Question

Quizplus · Accepted Answer

This statement is true because low-productivity nations typically have lower wages due to their lower levels of technology, education, and infrastructure. While trade can potentially increase wages by increasing the productivity of labor, this effect may not be strong enough to overcome the underlying differences in productivity levels between high- and low-productivity countries. In fact, some argue that trade can actually exacerbate wage inequality by allowing firms to move production to countries with lower labor costs. Therefore, it is most accurate to say that low-productivity nations have lower wages than high-productivity nations whether they trade or not.

Which of the Following Is TRUE Regarding Trade and Wages