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Free Trade : key informaiton
1. What are two reasons economists support free trade?
2. One of the basic economic laws is "the law of one price." It says that given certain assumptions, one would expect that if free trade is allowed, the prices of goods in countries that trade with each other should converge.
a. Can you list what three of those assumptions likely are?b. Should the law of one price hold for labor, also? Why or why not?c. Should it hold for capital (financial resources) more so or less so than for labor? Why or why not?
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