Question
For each of the following statements, if the statement is true, false or uncertain and explain why using words, figures, or both. a. According to
For each of the following statements, if the statement is true, false or uncertain and explain why using words, figures, or both. a. According to the Ricardian model, the United States will be worse off if productivity levels rise in China. b. According to the Ricardian model, an increase in the population of a country will not change the country's comparative advantage or real wages. c. In the Ricardian model, since absolute advantage is irrelevant for the gains from trade, Chile, a developing country, would be indifferent between signing a free trade agreement with Germany (a developed country with high levels of technology) or with Argentina (a developing country with low levels of technology). d. In the specific factors model, capital, the immobile factor will always resist signing free trade agreements.
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