Using the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that exports potatoes, an increase in the quantity of labor would... A) Worsen the terms of trade for that nation B) Improve the terms of trade for that nation C) Raise wages in that nation D) Both B and C
Using the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that exports potatoes, an increase in the quantity of labor would... A) Worsen the terms of trade for that nation B) Improve the terms of trade for that nation C) Raise wages in that nation D) Both B and C
Chapter21: International Trade And Finance
Section: Chapter Questions
Problem 10SQ
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Using the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that exports potatoes, an increase in the quantity of labor would...
A) Worsen the terms of trade for that nation
B) Improve the terms of trade for that nation
C) Raise wages in that nation
D) Both B and C
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