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

Question

Quizplus · Accepted Answer

In the specific factors model, trade generally increases overall welfare due to gains from trade. Fixed factors used in the production of the exported good benefit from trade as their demand increases, leading to positive effects on their welfare.

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