According to the specific factors model, why should one not expect the owners of capital to always present a united front on the question of openness versus protectionism?.
a. Owners of capital in import-competing industries will tend to welcome open trade in hopes of driving their domestic competitors out of business.
b. Economic interest is not the only factor that dictates individuals' decisions, and some owners of capital will act against their economic interest in pursuit of other goals.
c. Capital may be difficult to shift from one industry to another, and so owners invested in certain industries will lose from openness, while those invested in other industries will gain from it.
d. Although owners of capital share a common economic interest, the complex factors that play into the international economy often cause them to disagree over how best to pursue that interest.
e. Owners of capital tend to be leaders of their communities and in the nation and so usually weigh the economic good of the nation over their personal good when weighing in on matters of national trade policy.
Question 2
The choice between fixed and floating exchange rates typically involves a trade-off between
a. rates of unemployment and inflation.
b. absolute wealth and income distribution.
c. the value of the dollar and the value of gold.
d. the interests of owners and those of workers.
e. the benefits from international trade and investment and control over monetary policy.
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