Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 20: Q. 25 (page 490)

How is international trade, taken as a whole, likely to affect the average level of wages?

Short Answer

Expert verified

Increases.

Step by step solution

01

Step1. Introduction

International trade is the exchange of goods and services across the global/international borders. It refers to the free trade across countries.

It accumulates trade wealth and gains, further enhancing the production due to capital accumulation. All of it induces production as a whole, thereby increasing the number of jobs and demand for labor.

02

Step2. Explanation

As the production demand increases, it shall create demand for labor, thereby creating job opportunities.

When the demand for labor rises, and the supply more or less being the same, the wage rate shall go up.

Hence, international trade increases the average wage rates.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Explain how predatory pricing could be a motivation for dumping.

What might account for the dramatic increase in international trade over the past 50 years?

Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.

What is the general trend of trade barriers over recent decades: higher, lower, or about the same?

Name and define three policy tools for enacting protectionism.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free