In the context of international trade, the 'Stolper-Samuelson Theorem' predicts that:
A. Only labour always gains from trade
B. An increase in the relative price of a good raises the real return to the factor used intensively in its production
C. Trade benefits all factors of production equally
D. Factor prices are independent of goods prices
Answer: Option B
Solution (By JKSSB Mock Tests)
The Stolper-Samuelson theorem states that a rise in the relative price of a good increases the real return to the factor used intensively in that good and reduces the real return to the other factor.
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