The HO model assumes that when an economy shifts from no trade to free trade, the shifts in productive inputs from one industry to another:
A) cause suboptimal consumption decisions while consumers evaluate their new options relative to their past habits.
B) result in the abandonment of equipment and buildings (capital) in declining industries.
C) result in the loss of human capital because workers find their old skills are not needed and they must invest in learning new skills.
D) All of the above.
E) None of the above.
Correct Answer:
Verified
Q2: Compared to a hypothetical free trade equilibrium
Q3: Compared to a free trade equilibrium when
Q4: During the nineteenth century, transport costs:
A) fell
Q5: During the nineteenth century, price gaps:
A) shrank
Q6: The HO model assumes that when an
Q8: When an economy shifts from no trade
Q9: When an economy shifts from no trade
Q10: The model that shows how the economy
Q11: Compared to the Heckscher-Ohlin model, all other
Q12: Compared to the Heckscher-Ohlin model, all other
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