Suppose you are explaining the benefits of free trade and someone states, "I don't understand all the principles of comparative advantage and gains from trade. I just know that if I buy something produced in America, I create a job for an American, and if I buy something produced in Brazil, I create a job for a Brazilian." Are they correct in asserting that free trade costs U.S. jobs?
1) Yes, since any time we buy an imported good we ship a job abroad but do not create a job in the U.S. to compensate for the job loss.
2) No, since free trade creates more jobs for the U.S. economy than it costs the U.S.
3) No, since international trade does not affect jobs, only domestic taxes and regulations do.
4) Yes, since purchasing a domestically-produced good helps the U.S. economy but purchasing an imported good helps a foreign economy.