Suppose that there are two factors, capital and land, and that the United States is relatively capital abundant while Canada is relatively land abundant. According to the HO model,
A) Canadian landowners should support Canada-U.S. free trade.
B) Canadian capital owners should oppose Canada-U.S. free trade.
C) U.S. capital owners should support Canada-U.S. free trade.
D) All of the above.
D
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If a tax is imposed in a market in which demand is perfectly inelastic
A) the buyers pay the entire tax. B) the sellers pay the entire tax. C) the buyers and the sellers both pay a portion of the tax. D) neither the buyer nor the seller pays the tax.
The term "business fluctuations" refers to
A) changes in overall business activity, as evidenced by changes in national income, employment, and the price level. B) changes in the general price level from inflation to deflation, or vice versa. C) changes in the full employment level of economic activity. D) changes in the value of the dollar.