Why Are the Losers from Free International Trade Not Fully

question 55

Multiple Choice

Why are the losers from free international trade not fully compensated for their losses?

• A) The people who claim to lose are also the same ones who benefit.
• B) The losers are foreigners.
• C) The amount of compensation needed would bankrupt the government.
• D) No one actually loses from international trade.
• E) Identifying all losers and the size of their losses is extremely difficult.

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Definitions:

Nominal Wage

The wage paid to employees in current dollars, not adjusted for inflation, representing the face value of earned income.

Economic Income

The total value of all income received by an individual or entity, including both earned income and investment income.

Human Capital

The skills, knowledge, and experience possessed by an individual viewed in terms of their value or cost to an organization or country.

Compensating Differential

The difference in wages that compensates workers for undesirable aspects of a job, such as long hours or dangerous conditions.