Economics · International Trade Theories
According to the Stolper-Samuelson theorem, trade liberalisation in a capital-abundant developed country would most likely:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Raise wages of both skilled and unskilled workers equally
- 2Reduce wage inequality by raising returns to scarce unskilled labour
- 3Increase wage inequality by depressing returns to unskilled (scarce) labour and raising returns to capital✓
- 4Have no distributional consequences as factor prices are equalised globally
Correct answer
Increase wage inequality by depressing returns to unskilled (scarce) labour and raising returns to capital
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