The Main Explanation for Why the Cheap Foreign Labor Argument

question 108

Multiple Choice

The main explanation for why the cheap foreign labor argument is a poor reason for restricting international trade is that:

• A) workers who get paid less tend to have lower productivity than those who get paid more.
• B) all firms and workers gain when there are no restrictions on international trade.
• C) infant industries such as steel and automobiles need to be protected.
• D) specialization and free trade usually raise the prices of all the traded goods, so that the workers can get paid more.
• E) labor costs tend to be the same worldwide in the long run because of worker mobility.

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