Author Question: One of the predictions of the HO model is that A) countries with different factor endowments but ... (Read 59 times)

s.tung · **on:** Jun 30, 2018

One of the predictions of the HO model is that

A) countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other.
B) countries will tend to specialize, but not completely, in their comparative advantage good.
C) reciprocal demand leads to an equilibrium terms of trade by inducing changes in both demand and supply.
D) All of the above.

Question 2

The single most important factor in the 1992 crisis of the EMS was

A) ratification of the Single European Act.
B) the near failure of the Maastricht Treaty.
C) the fall in unemployment rates throughout the EEC.
D) German reunification efforts.
E) the outbreak of war in the former Yugoslavia.