1.Trade dependency is usually greater for large nations.

2. Nation can become rich and powerful only by exporting more than it imports.

3. If wages in nation 1 are lower than wages in nation 2, but labor productivity is much

higher in nation 2, labor costs are not necessarily higher in nation 2.

4. Improvement of a nation's terms of trade means such nation's exporting price increases.

5. From the Factor-price equalization theorem, international trade causes real wage to fall in the

U.S., therefore the government should restrict trade.

6. International trade is the major cause of the wage inequality during the past two decades.

true or false and

explain