True or false Questions: (7)When a country moves from restricted trade to free t
ID: 1131390 • Letter: T
Question
True or false Questions:(7)When a country moves from restricted trade to free trade, the abundant factor will benefit . ( Topic 5 )
(8) An export subsidy increases the ranges of both domestic exports and imports. ( Topic 22 )
(9) A subsidy to capital are more effective than a wage subsidy. ( Topic 22 )
(10) According to H-O theorem, a country tends to export those commodities which use its scarce factors of production intensively. ( Topic 12 )
(11) According to the theorem of Heckscher-Ohlin, a country tends to import those commodities which use its abundant factor intensively. ( Topic 12 ) True or false Questions:
(7)When a country moves from restricted trade to free trade, the abundant factor will benefit . ( Topic 5 )
(8) An export subsidy increases the ranges of both domestic exports and imports. ( Topic 22 )
(9) A subsidy to capital are more effective than a wage subsidy. ( Topic 22 )
(10) According to H-O theorem, a country tends to export those commodities which use its scarce factors of production intensively. ( Topic 12 )
(11) According to the theorem of Heckscher-Ohlin, a country tends to import those commodities which use its abundant factor intensively. ( Topic 12 )
(7)When a country moves from restricted trade to free trade, the abundant factor will benefit . ( Topic 5 )
(8) An export subsidy increases the ranges of both domestic exports and imports. ( Topic 22 )
(9) A subsidy to capital are more effective than a wage subsidy. ( Topic 22 )
(10) According to H-O theorem, a country tends to export those commodities which use its scarce factors of production intensively. ( Topic 12 )
(11) According to the theorem of Heckscher-Ohlin, a country tends to import those commodities which use its abundant factor intensively. ( Topic 12 ) (7)When a country moves from restricted trade to free trade, the abundant factor will benefit . ( Topic 5 )
(8) An export subsidy increases the ranges of both domestic exports and imports. ( Topic 22 )
(9) A subsidy to capital are more effective than a wage subsidy. ( Topic 22 )
(10) According to H-O theorem, a country tends to export those commodities which use its scarce factors of production intensively. ( Topic 12 )
(11) According to the theorem of Heckscher-Ohlin, a country tends to import those commodities which use its abundant factor intensively. ( Topic 12 )
Explanation / Answer
Answer : (7)When a country moves from restricted trade to free trade, the abundant factor will benefit . True.
By free trade a country exports factor abundant commodities which increases the demand for abundant factor . Therefore, abundant factor is benefited here.
(8) An export subsidy increases the ranges of both domestic exports and
imports. True.
Export subsidy increases the domestic exports which increases the domestic price level for domestic product. As a result domestic demand decreases for domestic products and increases the demand for foreign products which increases the imports.
(9) A subsidy to capital are more effective than a wage subsidy. False.
Capital subsidy increase the production of capital intensive goods. On the other hand, wage subsidy increase the employment level as employment increases, production also increases. Therefore, we can say that wage subsidy is more effective than capital subsidy.
(10) According to H-O theorem, a country tends to export those commodities which use its scarce factors of production intensively. False.
A country export factor intensive products in which the country is abundant.
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