Suppose that Home is a capitalabundant country. When Home trades with Foreign, a laborabundant country, the HO model predicts that the price of:
a. the laborintensive good will rise in Home.
b. the laborintensive good will rise in Foreign.
c. the capitalintensive good will rise in Foreign.
d. the capitalintensive good will fall in Home.
Answer: b. the laborintensive good will rise in Foreign.
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____ is a school of economic thought which uses equation of exchange to analyze the macro economic data
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