According to the Stolper-Samuelson Theorem, an Increase in the Price

question 32

Multiple Choice

According to the Stolper-Samuelson theorem, an increase in the price of a country's imports will:

• A)reduce the returns to all factors of production within the country.
• B)raise the returns to all factors of production within the country.
• C)reduce the returns to the factor of production used relatively intensively in the import-competing industry.
• D)raise the returns to the factor of production used intensively in the import-competing industry.

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Definitions:

Predation

The ecological process by which one organism hunts and consumes another organism for sustenance.

Precautionary Principle

A safety principle requiring that an action or policy having the potential to cause harm to the public or to the environment should not be undertaken if the consequences are uncertain or potentially dangerous.

Environmental Protection

Efforts and policies aimed at conserving the natural environment and preventing further degradation due to human activity.