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August 5, 2015

Homework Help: economic

Posted by karanzala on Tuesday, October 12, 2010 at 3:26am.

Show graphically and explain how a policy that increases the productivity of the labor input in a labor abundant country affects the equilibrium terms of trade between that country and a capital intensive country (assume that L and K are the only inputs and that the countries trade 2 goods X, a labor intensive good and Y a capital intensive good). You will need to use offer curves to answer this question.

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