Countries A and B have two factors of production, capital, and labor, with which they can produce two goods X and Y. Technology is the same in the two counties. X is capital intensive and A is capital abundant. Analyze the effects on the terms of trade and on the two countries' welfare (including factor payments) of the following:a. An increase in A's capital stock b. An increase in A's labor supply c. An increase in B's capital stock d. An increase in B's labor supply
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