According to the Stolper-Samuelson theorem,the imposition of a tariff by a nation:
A)increases the real return of the nation's abundant factor
B)increases the real return of the nation's scarce factor
C)reduces the real return of the nation's scarce factor
D)any of the above is possible

Question

Quizplus · Accepted Answer

The Stolper-Samuelson theorem posits that the imposition of a tariff by a nation increases the real return of the nation's scarce factor. This is because the tariff protects the domestic industries that use the scarce factor more intensively, thereby increasing its demand and its real return.

According to the Stolper-Samuelson Theorem,the Imposition of a Tariff by a Nation