Which of the following statements regarding the cheap foreign labor argument is correct?
A)If there is an abrupt change in foreign competition that severely penalizes American workers, the U.S.government should immediately adopt protectionist measures.
B)In the long run, labor will be cheap (wages are low) in those nations where labor is most productive.
C)If workers in other countries are willing to supply their products with little compensation, this must ultimately raise the standard of living of the average American worker.
D)American workers can never suffer from foreign competition since our monetary and fiscal policies always produce high employment at home.

Question

Quizplus · Accepted Answer

The correct statement is C because if workers in other countries are willing to supply their products with little compensation, it can lead to lower prices for those goods in the U.S., potentially increasing the purchasing power and thus the standard of living of the average American worker.

Which of the Following Statements Regarding the Cheap Foreign Labor