Which of the following has been confirmed by empirical tests of the Ricardian model? A. Companies tend to export goods in which they have a relatively high level of productivity B. International trade has no impact on income distribution C. The existence of nontraded goods results in a high degree of specialization among countries D. All predictions of the model for a multi-product, multi-country world are highly unrealistic. E. The unimportance of economies of scale as a cause of trade
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The Ricardian model of international trade focuses on comparative advantage, which arises from differences in labor productivity across countries. According to this model, countries will specialize in and export goods in which they have a comparative advantage, Show more…
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