If One Country's Wage Level Is Very High Relative to the Other's

question 65

Multiple Choice

If one country's wage level is very high relative to the other's (the relative wage exceeding the relative productivity ratios) ,then if they both use the same currency

• A) neither country has a comparative advantage.
• B) only the low wage country has a comparative advantage.
• C) only the high wage country has a comparative advantage.
• D) consumers will still find trade worth while from their perspective.
• E) it is possible that both will enjoy the conventional gains from trade.

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Definitions:

Non-directional Alternative Hypothesis

A non-directional alternative hypothesis is a type of hypothesis used in statistical testing that predicts a relationship between variables without specifying the direction of the relationship.

Non-directional Null Hypothesis

A type of null hypothesis that specifies there is no specific direction of difference or relationship between variables.

≠ Symbol

A mathematical symbol denoting inequality, indicating that two values are not equal.

Null Hypothesis

This hypothesis posits that there is no effect or no significant difference between specified populations.