Economist Joseph Stiglitz argues against free trade, stating that "a movement toward free trade brought wages of unskilled workers around the world closer together, meaning, for example, that America's unskilled workers' pay would fall towards that of India and China." Which of the following explains why this claim might also be used to argue that free trade benefits the United States?
A) A reduction in wages in the United States will reduce the number of individuals on government assistance (for example, Medicaid, food stamps, and unemployment insurance) .
B) A reduction in wages in the United States is likely to hurt only individuals in some sectors of the economy.
C) Wages across countries moving closer together implies that wages would fall in developing countries, which would create cheaper labor for U.S. firms that outsource production to other countries.
D) Wages across countries moving closer together implies that wages would rise in developing countries, which would allow them to purchase more goods produced in the United States.
Correct Answer:
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