H-O Model and Free Trade Agreement Quizzes

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What is the Stolper-Samuelson theorem predicting?

A relative rise in unskilled wages coinciding with a relative increase in skill-intensive good prices

A relative rise in skilled wages coinciding with a relative increase in skill-intensive good prices (correct)

A relative rise in unskilled wages coinciding with a relative decrease in skill-intensive good prices

A relative rise in skilled wages coinciding with a relative decrease in skill-intensive good prices

What is one possible explanation for the observed rise in inequality?

Skill-biased technological change (correct)

Rise of domestic demand

Offshoring of manufacturing jobs

Decrease in international trade

What did the Industrial Revolution result in, according to the text?

Real wages of British capitalists decreased

Increase in demand for handmade goods

Stagnation of real wages for weavers (correct)

Real wages of weavers increased

How does offshoring impact the demand for skilled labor?

It increases the demand for skilled labor Signup and view all the answers

What are the three facts explained by offshoring that are not consistent with the H-O model?

Rise in inequality, rise in demand for skilled workers, fall in price of skill-intensive goods Signup and view all the answers

In which regions of the US were labor markets most exposed to Chinese import competition?

Northeast and South Central Signup and view all the answers

What was observed in the more exposed commuting zones (CZs) between 2000 and 2007?

Larger fall in mean log weekly earnings Signup and view all the answers

'Trade Liberalization in Brazil Displaced workers' section implies that trade can:

...push workers into less desirable sectors even if overall employment remains stable Signup and view all the answers

'Open Question 1: What should be done with displaced workers?' suggests that displaced workers may need:

...retraining and skill development along with other forms of support Signup and view all the answers

'Open Question 2: Should workers displaced due to imports be treated differently than workers displaced due to computerization?' suggests that the treatment could be based on:

...skill-specific interventions or geographical factors or both Signup and view all the answers

According to the H-O model, who gains from trade?

Owners of abundant factor Signup and view all the answers

What is the effect of trade on wage inequality in the USA according to the text?

Increases wage inequality Signup and view all the answers

What is the main explanation given in the text for the shift in employment towards skilled workers despite rising relative wages for them?

Skill-based technological change Signup and view all the answers

Which theorem is linked to an increase in the real return to a factor used intensively in production of a good?

Stolper-Samuelson Theorem Signup and view all the answers

Which countries experienced a rise in skilled relative wages and returns to university education during the 80/90s according to the text?

Argentina, Brazil, Chile, Colombia, India, Mexico Signup and view all the answers

What is the correlation mentioned in the text in relation to industrial prices and imports from developing countries?

Decline in industrial prices correlated with increase in share of imports from developing countries Signup and view all the answers

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