How would the opening of trade affect the incomes of workers in the U.S. and China? Use the case studies in the chapter on U.S. trade with China to support your answer
What will be an ideal response?
Students should have a clear statement of the Stolper-Samuelson theorem.
• Trade benefits the nation's abundant factor and harms the nation's scarce factor.
• Thus, since the U.S. is abundant in skilled labor, skilled workers should be better off, and unskilled workers should be worse off. The reverse is true in China.
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Monetarists believe that changes in the money stock
a. have an immediate effect on the level of income. b. will always have a persistent impact on output for more than two years. c. do not affect the level of income to any great extent. d. have a persistent impact on output for as long as it takes the expected price level to adjust to the actual price level. e. both b and d.
Which of the following correctly describes price discrimination?
a. Selling different products to different people for the same price. b. Selling different products to identical people for different prices. c. Selling the same product to different people for different prices. d. Selling the same product to the same person for the same price.