Heckscher-Ohlin model predicts that the long run effect of a surge in FDI into China leads to Group of answer choices no change to the rental rates in China a decrease in rental rates in China a decrease in wages in China an increase in rental rates in China

The Heckscher-Ohlin theorem predicts that when a capital-abundant country opens to trade Group of answer choices Relative factor prices will not change Capital owners and workers will be better off This country will import labor-intensive good The real return on capital will increase The real wage in this country will increase

In the Heckscher-Ohlin model, an increase of capital stock by 30% and an increase of labour stock by 15% will Group of answer choices increase the output of labor-intensive good and will have an ambiguous effect on the output of capital-intensive good increase the output of labor-intensive good and will not affect the output of capital-intensive good have an ambiguous effect on the output of both goods increase the output of capital-intensive good and have an ambiguous effect on the output of labor-intensive good

In the Heckscher-Ohlin model, if Japan has less land per worker, and Australia has more land per worker, then if trade were to open up between these two countries, a. the real income of land owners in Australia would rise. b. the real income of labor in Australia would rise. c. the real income of labor in Japan would fall. d. the real income of landowners in Japan would rise

The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in theRicardian model, it is likely thatA) countries will not be fully specialized in one product.B) countries will benefit from free international trade.C) countries will consume outside their production possibility frontier.D) comparative advantage will not determine the direction of trade.E) global production will decrease under trade.

The Heckscher-Ohlin model assumes that there are two countries, each of which produces two goods(say manufactures and agriculture) using labor and capital. Which of the following is an additionalassumption of the Heckscher-Ohlin model?A. The ratio of the quantity of labor to the quantity of capital is different for each nation, resulting indifferent “endowments” of capital and labor.B. One nation has larger quantities of both capital and labor than the other country.C. Capital is a specific resource in producing manufactured goods, and labor is a specific resource inproducing agricultural goods in each country.D. Labor and capital can move between countries