Author Question: Empirical observations on actual North-South trade patterns tend to A) support the validity of ... (Read 50 times)

renzo156 · **on:** Jun 30, 2018

Empirical observations on actual North-South trade patterns tend to

A) support the validity of the Heckscher-Ohlin model.
B) support the validity of the Leontief Paradox.
C) support the validity of the Rybczynski Theorem.
D) support the validity of the wage equalization theorem.
E) support the validity of the neo-imperialism exploitation theory.

Question 2

If the real rate of interest is the same internationally, then the nominal interest rates differ solely by the expected inflation differential in two countries.

Indicate whether the statement is true or false

FergA · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

TRUE
Explanation:
id = rd + d and iF = rF + F
then id - iF = rd + d - rF - F
= d - F since rd and rF are equal