With Free Trade, If Country X Is Relatively Labor Abundant

Multiple Choice

With free trade, if country X is relatively labor abundant and relatively land scarce and country Y is relatively labor scarce and relatively land abundant, the factor-price equalization theorem predicts that:

A) rents will rise in country X and fall in country Y until they equalize.
B) wages will rise in country X and fall in country Y until they equalize.
C) rents will fall in country Y but will remain unchanged in country X.
D) wages will increase in country Y but will remain unchanged in country X.