As a result of trade between two countries which are of ...

[waynest]

As a result of trade between two countries which are of completely different economic sizes, specialization in the Ricardian 2X2 model tends to
 
  A) be incomplete in both countries.
  B) be complete in both countries.
  C) be complete in the small country but incomplete in the large country.
  D) be complete in the large country but incomplete in the small country.
  E) sustain one countries economy in in direct proportion to the other.

Question 2

Interest earned on foreign holdings of U.S. federal, state and local government debt are recorded in the
 
  A) services account.
  B) merchandise account.
  C) transfers account.
  D) capital account.

[ryhom]

Answer to Question 1

C

Answer to Question 2

C