Use the Table for the Following Question

question 45

Multiple Choice

Use the table for the following question
Suppose that all goods are made with two factors-labor and capital. The table below shows the total endowments of each factor in the United States and Canada. Table 4.1
Endowment of Labor and Capital

-Based on Table 4.1,according to the Stolper-Samuelson Theorem,the income distribution effects of free trade in the United States are likely to favor

• A)capital.
• B)labor.
• C)either capital or labor, depending on U.S. productivity.
• D)neither capital nor labor.

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Definitions:

Permanent Account

An account that is not closed at the end of the accounting period and whose balances are carried forward to the next period, such as assets, liabilities, and equity accounts.

Plant Assets

Long-term tangible assets that are used in the operation of a business and are subject to depreciation, excluding land.

Unclassified Balance Sheet

A simplified financial statement that presents assets, liabilities, and equity without categorizing them into further subdivisions.

Classified Balance Sheet

A financial statement that segregates assets and liabilities into current and non-current categories, providing a detailed snapshot of a company's financial condition at a specific time.