If labor in China is less productive than labor in the United States in all areas of production, then ____

(A) both the United States and China can benefit from trade.
(B) neither nation can benefit from trade.
(C) China can benefit from trade but not the United States.
(D) the United States can benefit from trade but not China.

Respuesta :

Answer:

C) China can benefit from trade but not the United States

Explanation:

If labor ceases to be productive in China, it would immediately have an impact on the economic benefits of companies, which are mostly foreign-owned companies.

Having the reduction in their profits, they would choose to close the factories, causing a crisis in employment being citizens who inhabit the countryside the main victims of this crisis. Young people and adults who work in these factories would be forced to return to their places of origin.

That said, the Chinese government, learning from the consequences of the 2008 crisis, will prefer to benefit from domestic trade, investing in agriculture and local businesses, strengthening its internal economy.

The United States cannot benefit from the internal trade that the Chinese government would propose and promote, but neither can it completely leave the Chinese economy, since this has been an important support of the dollar globally.

Therefore, the only winner of a situation like this would be China.