Answer the following statements true (T) or false (F)
1.The Ricardian theory of comparative advantage could fully explain the distribution of the gains from trade among trading partners.
2.When testing the Ricardian theory of comparative advantage in 1951, MacDougall found that nations tend to export goods in which their labor productivity is relatively high.
3.Because the Ricardian theory of comparative advantage was based only on a nation's supply conditions, it could only determine the outer limits within which the equilibrium terms of trade would lie.
4.The domestic cost ratios of nations set the outer limits to the equilibrium terms of trade.
5.Mutually beneficial trade for two countries occurs if the equilibrium terms of trade lies between the two countries' domestic cost ratios.
1.False
2.True
3.True
4.True
5.True
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When using the percent-of-sales method in forecasting the funds needed, which of the following is not true?
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