In the Heckscher­Ohlin Model with Two Goods and Two

question 121

Multiple Choice

In the Heckscher­Ohlin model with two goods and two
Factors, an increase in one factor will cause:

• A)an increase in the production of the good that uses the factor intensively.
• B)a decrease in the production of the good that use the factor intensively.
• C)an increase in the production of the good that does not use the factor intensively.
• D)no change in the production of both goods.

---

Definitions:

Social Security Tax

A tax that funds the Social Security program, imposed on both employers and employees based on wages earned.

State Disability Insurance

A government insurance program that provides partial wage replacement to eligible workers who are unable to work due to a disability.

Social Security Rate

The percentage rate at which income is taxed to fund the Social Security program.

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, as well as for some younger people with disabilities.