As Trade Occurs, Increased Imports Will Force Domestic

Multiple Choice

As trade occurs, increased imports will force domestic
Import­competing firms to decrease price and production.
Labor and capital will move to exporting firms.What will
Then happen to wages and returns to capital?

A) Both wages and returns to capital will increase.
B) Both wages and returns to capital will decrease.
C) Wages will increase and returns to capital will decrease.
D) Wages will decrease and returns to capital will increase.