It has been shown that the US has comparative advantage in capital-intensive goods while China has comparative advantage in labour-intensive goods. Suppose as a result of trade the US's economy is going to grow by 30% and that of China by 40%. Based on this information, which of the following statements is correct? Group of answer choices In the US, the employers are better off while the workers are worse off as a result of trade. The US has the stronger bargaining power in the determination of the relative price after trade. Specialization means that China will produce all the capital-intensive goods. China has the stronger bargaining power in the determination of the relative price after trade
It has been shown that the US has comparative advantage in capital-intensive goods while China has comparative advantage in labour-intensive goods. Suppose as a result of trade the US's economy is going to grow by 30% and that of China by 40%. Based on this information, which of the following statements is correct? Group of answer choices In the US, the employers are better off while the workers are worse off as a result of trade. The US has the stronger bargaining power in the determination of the relative price after trade. Specialization means that China will produce all the capital-intensive goods. China has the stronger bargaining power in the determination of the relative price after trade
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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It has been shown that the US has comparative advantage in capital-intensive goods while China has comparative advantage in labour-intensive goods. Suppose as a result of trade the US's economy is going to grow by 30% and that of China by 40%. Based on this information, which of the following statements is correct?
Group of answer choices
In the US, the employers are better off while the workers are worse off as a result of trade.
-
The US has the stronger bargaining power in the determination of the relative
price after trade. -
Specialization means that China will produce all the capital-intensive goods.
-
China has the stronger bargaining power in the determination of the relative price after trade.
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