How does free trade affect the United States? Select all that apply.
A.
lower prices
B.
decreased wages
C.
higher farm profits
D.
less variety in businesses
E.
more low-skill jobs
F.
increased consumer choice
To determine how free trade affects the United States, let's examine each option:
A. Lower prices: Free trade allows countries to import goods at lower costs, leading to increased competition among domestic producers. This competition tends to lower prices for consumers, as imported goods may be cheaper than domestically produced ones.
B. Decreased wages: Free trade may lead to lower wages in industries facing competition from imported goods. When businesses face competition from cheaper foreign products, they may need to cut costs (including labor costs) to remain competitive.
C. Higher farm profits: Free trade can benefit some sectors, such as farming, by expanding export opportunities and increasing demand for agricultural products. This increased demand can potentially lead to higher profits for farmers.
D. Less variety in businesses: Free trade can result in the specialization of certain industries in which a country has a comparative advantage. This specialization can lead to a decrease in the variety of businesses within those industries, as resources are concentrated in the most efficient areas.
E. More low-skill jobs: Free trade can lead to the growth of industries that rely on low-skilled labor due to lower labor costs in other countries. This may result in an increase in low-skill job opportunities in certain sectors.
F. Increased consumer choice: Free trade often means access to a wider range of goods and services from around the world. This increased competition can lead to more choices for consumers, as they have access to products that may not be available domestically.
Based on these explanations, the options that apply to how free trade affects the United States are:
- A. Lower prices
- C. Higher farm profits
- E. More low-skill jobs
- F. Increased consumer choice