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Multiple Choice Quiz
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1

If the Heckscher-Ohlin-Samuelson model accurately reflects a relatively labor abundant country's trade patterns,
A)the Leontief statistic should be greater than 1.
B)the Leontief statistic should be less than 1.
C)the country's capital-labor ratio should be relatively high.
D)b and c are both correct.
2

According to Leontief's research, the Leontief statistic for the U.S. is
A)greater than 1, a finding that contradicts the Heckscher-Ohlin theorem.
B)less than 1 as predicted by the Heckscher-Ohlin theorem.
C)less than 1, a finding that contradicts the Heckscher-Ohlin theorem.
D)greater than 1 as predicted by the Heckscher-Ohlin theorem.
3

Which of the following has not been offered as an explanation for the Leontief paradox?
A)factor intensity reversals
B)demand reversals
C)illegal migration of labor to capital-abundant countries
D)all of the above
4

Empirical testing has
A)provided clear evidence of the validity of the Heckscher-Ohlin theorem.
B)conflicting evidence as to the validity of the Heckscher-Ohlin theorem.
C)provided clear evidence of the invalidity of the Heckscher-Ohlin theorem.
D)not yet been undertaken in the case of the Heckscher-Ohlin theorem.
5

If demand reversals are common in practice, the U.S. wage rate should be relatively
A)high; this is consistent with the evidence that is observed.
B)high; this is inconsistent with the evidence that is observed.
C)low; this is consistent with the evidence that is observed.
D)low; this is inconsistent with the evidence that is observed.
6

If we allow for the effects of the U.S. tariff structure, the Leontief statistic would be
A)unaffected.
B)higher.
C)lower.
D)zero.
7

If natural-resource-intensive industries are deleted from the tests, the Leontief statistic for the U.S. __________; this __________ the Leontief paradox.
A)rises; weakens or eliminates
B)rises; strengthens
C)falls; weakens or eliminates
D)falls; strengthens
8

A finding that the U.S. is relatively abundant in skilled labor and tends to export skilled-labor-intensive products
A)weakens the Leontief paradox and makes the Heckscher-Ohlin theorem more credible.
B)weakens the Leontief paradox and makes the Heckscher-Ohlin theorem less credible.
C)strengthens the Leontief paradox and makes the Heckscher-Ohlin theorem more credible.
D)strengthens the Leontief paradox and makes the Heckscher-Ohlin theorem less credible.
9

Suppose a relatively capital-abundant country is found to have a Leontief statistic that is less than 1. This indicates that
A)factor-intensity reversals are relatively common.
B)transportation costs are probably insignificant.
C)the Heckscher-Ohlin-Samuelson model may accurately predict the pattern of trade.
D)demand reversals are relatively common.
10

Income inequality in the U.S. has __________ in recent decades. This phenomenon _________ predicted by an expanded Heckscher-Ohlin framework with capital, unskilled labor, and skilled labor as the factors of production.
A)fallen; is
B)risen; is
C)fallen; is not
D)risen; is not





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