Explain which group in France (capital or labour) support policies to limit free trade in the aircraft in the long run.

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suppose there are only two countries in the world : Canada and France

Question

suppose there are only two countries in the world : Canada and France. The two countries liberalize trade in aircraft (a capital – intensive goods) , which Canada imports. please answer the following questions ,and explain your answers in clear details that any non-economist could understand.

a) According to the H-O model, is France Capital abundant or labour abundant? Explain .

b) Explain the impact of free trade on real wage in France in the long run.

c) Explain the impact of free trade on the real return on capital in France in the long run.

d) Explain which group in France (capital or labour) support policies to limit free trade in the aircraft in the long run.

suppose there are only two countries in the world : Canada and France

 

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