The Stolper-Samuelson theorem indicates that given certain assumptions and conditions:
A)the real return to the factor used intensively in the import-competing industry will rise in the long-run.
B)the real return to the factor used intensively in the export industry will fall in the long-run.
C)the real return to all the resources in an economy will increase.
D)the real return to the factor used intensively in the export industry will rise in the long-run.

Question

Quizplus · Accepted Answer

The Stolper-Samuelson theorem states that when the price of a good rises, the real return to the factor used intensively in the production of that good will also rise. Therefore, in the context of international trade, the factor used intensively in the export industry will see an increase in its real return.

The Stolper-Samuelson Theorem Indicates That Given Certain Assumptions and Conditions