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If the Comparative Advantage Between Japan and Korea Was Due

Question 130

Multiple Choice

If the comparative advantage between Japan and Korea was due only to differences in relative capital and labor abundance, then trade would tend to


A) increase real wages in the higher-wage country and lower real wages in the lower-wage country.
B) have no effect on the real wages in either country.
C) increase real wages in the lower-wage country and lower real wages in the higher-wage country.
D) decrease money wages in the lower-wage country and raise money wages in the higher-wage country.
E) prevent wages from changing in either country.

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