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According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored
According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored from Japan to Mexico, the skilled-unskilled wage ratio will:
- (a)Decrease in both countries.
- (b)Increase in Japan but decrease in Mexico.
- (c)Decrease in Japan but in increase in Mexico.
- (d)Increase in both countries.
Explain your answer clearly.
PLEASE EXPLAIN CLEARLY TO MAKE ME UNDERSTAND, NO COPY AND PASTE FROM BOOK AS I HAVE READ A LOT
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