Those who will lose from free trade are ________ factors in sectors that produce goods that are ________.
A) immobile; also imported
B) mobile; also imported
C) immobile; exported
D) mobile; exported
E) mobile; untraded

Question

Quizplus · Accepted Answer

The statement "Those who will lose from free trade are immobile factors in sectors that produce goods that are also imported" best reflects the concept of trade-based redistribution. Immobility in factors means that they cannot adjust to changing conditions, and hence, they are at a disadvantage when exposed to international competition. Import-competing sectors, which produce goods that are also imported, would face a decline in demand and output due to increased foreign competition resulting from free trade. Hence, the correct option is A.

Those Who Will Lose from Free Trade Are ________ Factors