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1)(5 pts) Foreign is abundant in skilled labor relative to unskilled labor and Home is abundant in unskilled labor relative to skilled labor. After Foreign

1)(5 pts) Foreign is abundant in skilled labor relative to unskilled labor and Home is abundant in unskilled labor relative to skilled labor. After Foreign increased its trade with Home, wage inequality rose in both Home and Foreign. Is this consistent with the predictions of the Stolper-Samuelson theorem? Explain. (assume that initially the wage of the unskilled labor is less than the wage of the skilled labor in both countries)

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