Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. When country A opened up to trade, it experienced an increase in nominal wage. We can infer with certainty that O The world trade relative price is different from country A's autarky relative price O Country A has comparative advantage in G2 O Real wage remained the same in country B O Country A has comparative advantage in G1
Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. When country A opened up to trade, it experienced an increase in nominal wage. We can infer with certainty that O The world trade relative price is different from country A's autarky relative price O Country A has comparative advantage in G2 O Real wage remained the same in country B O Country A has comparative advantage in G1
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter23: The International Trade And Capital Flows
Section: Chapter Questions
Problem 19SCQ: Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is...
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