Multiple Choice
Which of the following assumptions is common to both New Trade Theory and the model of intra-industry trade?
A) trade is a zero-sum game
B) production exhibits increasing returns to scale
C) firms behave cooperatively rather than competitively
D) exchange rates adjust to offset the effects of tariffs
E) in the long run, exports equal imports
Correct Answer:
Verified
Correct Answer:
Verified
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