Between 1980 and 2014, income inequality in the United States has increased in part due to expanding international trade.How does expanding international trade contribute to income inequality?
A)It increases the demand for a wide array of products which in turn increases prices beyond the reach of average-income individuals.
B)It allows producers to exploit workers and reduce the wages they are willing to pay workers.
C)Domestic firms can now hire low-skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This has caused the wages of unskilled workers to be depressed relative to the wages of other workers.
D)It reduces the cost of producing goods and therefore lowers the value of labor's services.

Question

Quizplus · Accepted Answer

Expanding international trade allows domestic firms to hire low-skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This competition has caused the wages of unskilled workers to be depressed relative to the wages of other workers, contributing to income inequality.

Between 1980 and 2014, Income Inequality in the United States