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

question 33

Multiple Choice

In the specific factors model,the effects of trade on welfare overall are ________ and for fixed factors used to produce the imported good they are ________.

• A) positive; negative
• B) positive; positive
• C) negative; positive
• D) ambiguous; positive
• E) positive; ambiguous

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Definitions:

Capital Goods

Long-term assets used in the production of other goods and services, such as machinery, buildings, and equipment.

Consumer Goods

Products and services that are purchased by individuals for personal consumption and satisfaction.

Technological Improvements

Enhancements or advancements in technology that increase production efficiency, product quality, or introduce new goods and services.

Full Employment

A situation in which all available labor resources are being used in the most economically efficient way, typically characterized by the absence of cyclic unemployment.