Question

true or false? because trade raises the amount that an economy can produce by letting firms and workers play to their comparative advantage, trade will also cause the average level of wages in an economy to fall.

Answer 1

False. As trade will also cause the average level of wages in an economy to rise and not fall.

The relationship between free trade and wages

Free trade results in an increase in all factor incomes, including wages, interest rates, profits, and rents, which raises GDP and makes more money available for company investment, which boosts global trade.

Trade will increase the average pay level in an economy because it increases the amount that an economy can produce by allowing businesses and workers to take use of their comparative advantages.

Therefore, employers will value employees who can create more, which will cause the demand for their labor to move to the right and raise earnings in the labor market. Contrarily, trade restrictions will cause an economy's average pay level to decline.

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Answer 2

Because trade raises the amount that an economy can produce by letting firms and workers play to their comparative advantage, trade will also cause the average level of wages in an economy to fall is a False statement.

What is the relationship between free trade and wages?

Free trade results in an increase in all factor incomes, including wages, interest rates, profits, and rents, which raises GDP and makes more money available for company investment, which boosts global trade.

Trade will increase the average pay level in an economy because it increases the amount that an economy can produce by allowing businesses and workers to take use of their comparative advantages.

Therefore, employers will value employees who can create more, which will cause the demand for their labor to move to the right and raise earnings in the labor market. Contrarily, trade restrictions will cause an economy's average pay level to decline.

Learn more about trade from;

brainly.com/question/5719305

#SPJ1