Economics · International Trade Theories
According to the Stolper-Samuelson theorem, which of the following statements is true?
- 1Economic growth always benefits capital and labor equally.
- 2Trade liberalization increases the real return of the relatively abundant factor and decreases the real return of the scarce factor.✓
- 3A tariff protection increases the reward of the factor used intensively in the import-competing industry.
- 4An increase in international trade leads to an increase in real wages of both skilled and unskilled labor.
Correct answer
Trade liberalization increases the real return of the relatively abundant factor and decreases the real return of the scarce factor.
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