If trade causes shifts in production so that some workers are laid off, most economists conclude:
A) that the nation should extend unemployment benefits for a longer period.
B) that the situation is usually temporary because there are jobs created in export industries.
C) that we should expect wages to fall and therefore should not allow imports to take U.S. jobs.
D) that all workers will be better off because overall the equilibrium wage will rise.

Question

Quizplus · Accepted Answer

Most economists conclude that the situation is usually temporary because there are jobs created in export industries. As the economy adjusts to trade, there may be short-run job losses in some sectors but in the long-run, the economy will benefit from the increased efficiencies and specialization that trade brings. This means that there will be new job opportunities in other sectors that are more competitive in the global market.

If Trade Causes Shifts in Production So That Some Workers