According to the Theory of Trade, If Two Countries Trade

question 22

Multiple Choice

According to the theory of trade, if two countries trade witheach other:

• A)consumption in one country will fall and wages will also fall.
• B)wage costs will remain low if both countries specialize in producing the goods for which they have a comparative
• Advantage.
• C)trade raises the labor productivity and wages of both countries.
• D)wages in the country with a comparative advantage will rise and wages in the country without a comparative advantage will
• Fall.

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Definitions:

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Unconditioned Response

A natural, unlearned reaction to an unconditioned stimulus that occurs automatically without previous conditioning.

Conditioned Response

A learned response to a previously neutral stimulus through conditioning.

Unconditioned Response

This is an automatic, natural reaction to a stimulus that occurs without prior learning or conditioning.