Question
Assume a Heckscher-Ohlin world with two goods (X and Y), two factors of production (capital and labor) and under free trade. The production factors are
Assume a Heckscher-Ohlin world with two goods (X and Y), two factors of production
(capital and labor) and under free trade. The production factors are labour and capital.
Consumer preferences for good X are reduced and good X is the labour intensive product. What
happens to relative demand and relative rewards for labor and capital?
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Macroeconomics
Authors: David Colander
8th edition
978-0078004407, 78004403, 978-0077247171, 77247175, 978-0077307110
