The USA produces agricultural products using land and manufactured products using capital. When the USA engages in free trade, it starts exporting manufactured products, (the price of manufactured products in the US increases). In the short run, which one of the following scenarios takes place? Group of answer choices Both nominal and real returns on land increase Nominal return on land decreases while real return on land remains the same Nominal return on capital increases while real return on capital falls Nominal returns on both land and capital increase Both nominal and real returns on land decrease

Italy produces agricultural products and manufactured products, using both labour and capital. Manufacturing is capital-intensive while agriculture is labour-intensive. When Italy engages in free trade, it starts exporting manufactured products. In the long run, which one of the following scenarios is correct? Group of answer choices Italy becomes more capital-abundant. Real rental in the manufacturing industry increases more than the real rental in the agricultural industry. Real wage in Italy falls. Allocation of Italian capital between sectors remains unchanged compared to autarky.

France produces agricultural products and manufactured products, using both labour and capital. When France engages in free trade, it starts exporting manufactured products, which is capital intensive.In the long run, which one of the following scenarios is incorrect?Group of answer choicesFrance remains capital abundant.Allocation of French capital changes compared to autarky.Real wage in France falls.Real rental in the manufacturing industry increases more than the real rental in the agricultural industry.

The long-run result of financial losses in U.S. agriculture is the loss in ______.Multiple choice question.real gross domestic productfarming superioritythe number of farmstariffs

Consider an open, trading economy with two sectors: agriculture and production of cars. There are two factors used in the production of both industries: labor, mobile between the industries, land specific to agricultural production and capital specific to the production of cars. Workers spend most of their earnings on cars.Formation of free trade area led to the decrease in the price of cars by 5%. Which one of these observations will apply? Group of answer choicesThe labor/capital ratio increases in both sectorsNone of the other three options are correctLabor force allocation remains the sameThe car sector now uses relatively more labor

6. Suppose Canada's economy is in a long-run equilibrium with real GDP equal to potential output.Now suppose there is a decrease in the Canadian price of all imported raw materials. In the shortrun, ________. In the long run, ________.A) real GDP and the price level both fall; real GDP is below its original level with a lower price levelB) real GDP and the price level both rise; real GDP is above its original level with a higher price levelC) real GDP and the price level both rise; real GDP returns to its original level with a higher price levelD) real GDP rises and the price level falls; real GDP and the price level return to their original levelsE) real GDP falls and the price level rises; real GDP is below its original level with a higher price