Carefully explain for each of the following two statements, Ask an Expert

Economics

Carefully explain, for each of the following two statements, why the statement is either TRUE or FALSE.

(a) "In a 2x2x2 Heckscher-Ohlin context, when a relatively labor-abundant country moves from autarky to trade, the real return to capital in the import-competing industry decreases and the real return to capital in the export industry also decreases."

(b) "In the ‘specific-factors model,' with capital fixed in each sector, when a relatively labor-abundant country moves from autarky to trade, the real return to capital in the import-competing industry decreases and the real return to capital in the export industry also decreases."

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91522546

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