The Difference Between Temporary Factor-Price Differentials and Equilibrium Factor-Price Differentials

Multiple Choice

The difference between temporary factor-price differentials and equilibrium factor-price differentials is that

A) equilibrium differentials are affected by shifts in demand and supply whereas temporary differentials are not.
B) equilibrium differentials lead to,and are eliminated by,factor mobility whereas temporary differentials do not.
C) the government can only eliminate equilibrium differentials.
D) temporary differentials lead to,and are eliminated by,factor mobility whereas equilibrium differentials do not.
E) only equilibrium differentials are interesting for policy purposes.