H-O Model and Free Trade Agreement Quizzes

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16 Questions

What is the Stolper-Samuelson theorem predicting?

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

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

Skill-biased technological change

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

Stagnation of real wages for weavers

How does offshoring impact the demand for skilled labor?

It increases the demand for skilled labor

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

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

Northeast and South Central

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

Larger fall in mean log weekly earnings

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

...push workers into less desirable sectors even if overall employment remains stable

'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

'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

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

Owners of abundant factor

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

Increases wage inequality

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

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

Stolper-Samuelson Theorem

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

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

Test your knowledge on the predictions of the H-O model, winners and losers from trade, and the impact of free trade agreements on wage inequality in different countries. Explore the relationship between factors like skilled and unskilled labor, trade, and industrial prices.

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