Which of the Following Statements Best Indicates Samuelson's Criticism of Free

question 98

Multiple Choice

Which of the following statements best indicates Samuelson's criticism of free trade?

• A) Dynamic gains lead to a universally beneficial outcome for all countries.
• B) Offshoring service jobs that were traditionally mobile will increase the market clearing wage rate.
• C) Free trade has historically been beneficial only to third world countries.
• D) By importing cheap goods from a poor country a rich country may not be able to produce a net gain if the dynamic effect of free trade is to lower real wage rates in the rich country.
• E) Trade changes a country's stock of resources and the efficiency with which it utilizes those resources.

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Definitions:

Financial Market

The marketplace where buyers and sellers interact to trade financial instruments, such as stocks, bonds, currencies, and derivatives, often within an institutional framework.

Crowding-Out

A situation where increased government spending leads to a reduction in private sector spending.

Government Purchases

Expenditures made by the government for goods and services that are necessary for the public sector and to support economic activity.

National Output

The total value of goods and services produced by a country's economy over a specific period of time. It's synonymous with gross domestic product (GDP).