Multiple Choice
Suppose that the home country in the two-sector (manufacturing and agriculture) specific-factors model has a comparative advantage in manufactured output. What is the effect on the return of capital after trade occurs?
A) The return on capital increases.
B) The return on capital decreases.
C) The return on capital does not change.
D) The effect cannot be determined.
Correct Answer:
Verified
Correct Answer:
Verified
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