Which of the following could explain the growing gap in income between unskilled and skilled workers in the United States?
A) International trade has increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor.
B) Certain technological changes such as the introduction of computers have increased the domestic demand for skilled labor and decreased the domestic demand for unskilled labor.
C) Both a and b are correct.
D) Neither a nor b is correct.

Question

Quizplus · Accepted Answer

The gap in income between unskilled and skilled workers in the United States can be explained by both international trade and technological changes. International trade has increased the demand for skilled labor, while decreasing the demand for unskilled labor. And technological changes, such as the introduction of computers, have increased the demand for skilled labor while decreasing the demand for unskilled labor. Both of these factors have contributed to the growing income gap between the two groups of workers.

Which of the Following Could Explain the Growing Gap in Income