How do labor market conditions in foreign countries impact labor market conditions domestically?
In a world where the economy is becoming more global and businesses and corporations can establish locations just about anywhere, international labor market conditions are increasingly becoming more interconnected. In the study of macroeconomics, the field of economics concerned with economies as a whole, there is a concept known as comparative advantage. In brief, comparative advantage means that one country or region has a relative advantage in the production efficiency of a given commodity. For example, it would probably be fair to guess that Columbia can produce coffee more efficiently and for much less cost than could be produced within the United States. Therefore, Columbia has a comparative advantage in coffee. On the other hand, the U.S. probably has a comparative advantage over Columbia in automobile production. When comparative advantages exist, economies benefit by specializing in the product where they hold the advantage. Columbia specializes in coffee, which means they pro
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