During the 2016 presidential campaign, Bernie Sanders, a Democratic candidate, and Donald Trump, a Republican candidate, both denounced NAFTA as having a negative impact on jobs in the United States. In particular, they cited the impact on manufacturing jobs. SELECT THE CORRECT ANSWER   A. Free trade agreements may lead to reduced output and the loss of American jobs in certain industries because: -in industries in which the United States has a comparative advantage, domestic firms typically lose market share. -in industries in which the United States has a lower opportunity cost, foreign firms typically gain market share. -in industries in which a trading partner has a comparative advantage, domestic firms typically lose market share. -in industries in which a trading partner has a higher opportunity cost, domestic firms typically gain market share.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter34: Globalization And Protectionism
Section: Chapter Questions
Problem 54CTQ: Trade has income distribution effects. For example, suppose that because of a government-negotiated...
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During the 2016 presidential campaign, Bernie Sanders, a Democratic candidate, and Donald Trump, a Republican candidate, both denounced NAFTA as having a negative impact on jobs in the United States. In particular, they cited the impact on manufacturing jobs.

SELECT THE CORRECT ANSWER
 
A. Free trade agreements may lead to reduced output and the loss of American jobs in certain industries because:
-in industries in which the United States has a comparative advantage, domestic firms typically lose market share.
-in industries in which the United States has a lower opportunity cost, foreign firms typically gain market share.
-in industries in which a trading partner has a comparative advantage, domestic firms typically lose market share.
-in industries in which a trading partner has a higher opportunity cost, domestic firms typically gain market share.
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