A redistribution effect of international trade unambiguously involves:
A) a shift of income from people affiliated with one set of industries to people associated with other industries.
B) an equiproportionate expansion of consumption possibilities for all of a nation-s residents.
C) a situation in which the nation has no comparative advantage.
D) a situation in which the nation experiences no absolute advantage.

Question

Quizplus · Accepted Answer

A redistribution effect of international trade means that certain industries or groups of people may benefit while others may lose out. It involves a shift of income from people associated with certain industries to people associated with other industries. This is not equiproportionate expansion of consumption possibilities for all of a nation's residents as stated in choice B, nor does it imply that the nation has no comparative advantage as stated in choice C or that the nation experiences no absolute advantage as stated in choice D.

A Redistribution Effect of International Trade Unambiguously Involves