Multiple Choice
If a capital-abundant country freely trades with a labor-abundant country, there will be a tendency for:
A) wages to rise relative to the price paid to capital in the capital-abundant country.
B) wages to fall relative to the price paid to capital in the capital-abundant country.
C) wages to rise relative to the price paid to capital in both countries.
D) wages to fall relative to the price paid to capital in both countries.
E) the price of labor and capital to stay the same.
Correct Answer:
Verified
Correct Answer:
Verified
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