In the specific factors model,the effects of trade on welfare are ________ for mobile factors,________ for fixed factors used to produce the exported good,and ________ for fixed factors used to produce the imported good.
A) ambiguous; positive; negative
B) ambiguous; negative; positive
C) positive; ambiguous; ambiguous
D) negative; ambiguous; ambiguous
E) positive; positive; positive

Question

Quizplus · Accepted Answer

In the specific factors model, the effects of trade on welfare are ambiguous for mobile factors, positive for fixed factors used to produce the exported good, and negative for fixed factors used to produce the imported good. Therefore, option A is the correct answer.

In the Specific Factors Model,the Effects of Trade on Welfare