According to the HeckscherOhlin model, international
Trade for a nation with a relative abundance of skilled labor
And a relative scarcity of unskilled labor will tend to:
A)widen or aggravate the income disparity between skilled and unskilled workers.
B)reduce the income disparity between skilled and unskilled workers.
C)lower the wages of both groups of workers.
D)raise the wages of both groups of workers.

Question

According to the Heckscher­Ohlin model, international
Trade for a nation with a relative abundance of skilled labor
And a relative scarcity of unskilled labor will tend to:
A)widen or aggravate the income disparity between skilled and unskilled workers.
B)reduce the income disparity between skilled and unskilled workers.
C)lower the wages of both groups of workers.
D)raise the wages of both groups of workers.

Quizplus · Accepted Answer

According to the Heckscher­Ohlin model, a country with a relative abundance of skilled labor and a relative scarcity of unskilled labor will specialize in the production of goods that require skilled labor and import goods that require unskilled labor. As a result, the demand for skilled labor will increase, leading to higher wages for skilled workers, while the demand for unskilled labor will decrease, leading to lower wages for unskilled workers. This will widen or aggravate the income disparity between skilled and unskilled workers.

According to the Heckscher­Ohlin Model, International

According to the HeckscherOhlin Model, International