The ricardian model of comparative advantage is based

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44. The Ricardian model of comparative advantage is based on all of the following assumptions except : a. Only two nations and two products b. Product quality varies among nations c. Labor is the only factor of production d. Labor can move freely within a nation 45. The writings of G. D. A. MacDougall emphasized which of the following as an explanation of a country’s competitive position? TRUE-FALSE QUESTIONS T F 1. According to the mercantilists, a nation’s welfare would improve if it maintained a surplus of exports over imports. T F 2. The mercantilists maintained that a free-trade policy best enhances a nation’s welfare. T F 3. The mercantilists contended that because one nation’s gains from trade come the expense of its trading partners, not all nations could simultaneously realize gains from trade. T F 4. According to the price-specie-flow doctrine, a trade-surplus nation would experience gold outflows, a decrease in its money supply, and a fall in its price level. 8
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