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Q. Consider that the relative capital abundance of Australia was so much greater than that of Sri-Lanka, that we would have to locate Australia far to the right on the K/L axis. If this were so far to the right that there was no area of overlap on the w/r axis, then which product would Australia export?
Answer: Australia export food like a result of trade wages will fall in Australia and will rise in Sri-Lanka. Though in this case the wages in Australia will stay higher than in Sri-Lanka create an incentive for migration from the latter to the former country.
Critically evaluate the classical theory of international trade
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
is general equilibrum in trade
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