How would the opening of trade affect the incomes of workers in the U.S. and China? Use the case studies in the chapter on U.S. trade with China to support your answer
What will be an ideal response?
Students should have a clear statement of the Stolper-Samuelson theorem.
• Trade benefits the nation's abundant factor and harms the nation's scarce factor.
• Thus, since the U.S. is abundant in skilled labor, skilled workers should be better off, and unskilled workers should be worse off. The reverse is true in China.
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Another term for factors of production is
a. inputs. b. output. c. goods. d. services.
Which of the following is an example of the precautionary motive for saving?
A. Jordan sets aside $200 per month in case she has to pay for a new roof for her house. B. Every month, Chris puts $400 into his saving account so that he can buy a new car in a few years. C. Pat puts $400 per month in his 401(k) retirement account. D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when the parents die.
Contractionary fiscal policy is so named because it:
A. is expressly designed to contract real GDP. B. involves a contraction of the nation's money supply. C. necessarily reduces the size of government. D. is aimed at reducing aggregate demand and thus achieving price stability.
Which of the following is FALSE with respect to brand names and advertising?
A. Because "differentness" has value to customers, monopolistically competitive firms regard their brand names as valuable. B. There is considerable shifting over time in the market value rankings of various U.S. product brands. C. Firms use trademarks-words, symbols, and logos-to distinguish their product brands. D. Companies do not regard their brands as valuable private (intellectual) property because the value cannot be quantified.