If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for
A)both skilled and unskilled labor will rise proportionately.
B)skilled labor will fall and the demand for unskilled labor will rise.
C)skilled labor will rise and the demand for unskilled labor will fall.
D)both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

Question

Quizplus · Accepted Answer

As the U.S. expands trade with countries where unskilled labor is cheap, it will likely import more goods that require unskilled labor, reducing the domestic demand for unskilled labor. Conversely, the demand for skilled labor may increase as the U.S. focuses on industries requiring more skilled workers.

If Unskilled Labor Is Relatively Plentiful and Cheap in Many