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Scale form the basis for international trade

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Reference no: EM132299181

Answer the following questions as true or false:

1. Trade has no effect on the distribution of incomes within countries in trade relations.

2. Internal economies of scale form the basis for international trade.

3. Economies of scale give rise to international? trade

4. Preferential trade agreements are welfare improving if they lead to trade diversion.

5. GATT is a more formal organization with larger scope.

6. Developing countries used import substitution strategy to restrict imports of manufactured goods.

7. Movement of labor from the United States to Japan reduces the marginal physical product of labor in the United States.

8. The SF model is not a variant of the Ricardian model.

9. The best interpretation for the slope of the production possibility frontier is the degree of specialization

10. American workers gain from free trade with China because free trade lowers prices of manufactured goods in the United States and American workers spent very large portion of their income on manufactures.

Reference no: EM132299181

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