Increasing wage inequality results when international trade leads to ________ wages for workers in exporting industries and ________ wages for workers in importing industries.
A)higher; higher
B)higher; lower
C)lower; no change in
D)lower; higher

Question

Quizplus · Accepted Answer

In industries where U.S. foreign competition is weak, workers see increasing wages due to increased demand for such workers with globalization. Conversely, in industries where foreign competition is strong, U.S. workers see falling real wages due to decreased demand for such workers. This phenomenon increases wage inequality.

Increasing Wage Inequality Results When International Trade Leads to ________