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Suppose that Australia and India trade only with each other. Each produces beef and gold. The production of beef is relatively labour intensive, and the
Suppose that Australia and India trade only with each other. Each produces beef and gold. The production of beef is relatively labour intensive, and the production of gold is relatively capital intensive. Australia is relatively abundant in capital, while India is relatively abundant in labor. According to the Stolper-Samuelson theorem, free trade between Australia and India should result in: Group of answer choices increased real wages in both countries increased real returns to capital in Australia and increased real wages in India. decreased real wages in both countries. increased real wages in Australia and increased real returns to capital in India
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