Based on the information in the table above, what would be the income distribution effects of free trade between the US and Canada? A) Free trade is likely to favour neither capital nor labour capital in the United States. B) Free trade is likely to favour labour in the United States. C) Free trade is likely to favour either capital or labour in the United States, depending on U.S. productivity. D) Free trade is likely to favour capital in the United States.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Based on the information in the table above, what would be the income distribution effects of free
trade between the US and Canada?
A) Free trade is likely to favour neither capital nor labour capital in the United States.
B) Free trade is likely to favour labour in the United States.
C) Free trade is likely to favour either capital or labour in the United States, depending on U.S. productivity.
D) Free trade is likely to favour capital in the United States.

Table - endownment of labour (workers) and capital (machines)
US
100
Canada
Workers
10
Machines
20
Transcribed Image Text:Table - endownment of labour (workers) and capital (machines) US 100 Canada Workers 10 Machines 20
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