Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highly unrealistic.
B) The existence of nontraded goods results in a high degree of specialization among countries.
C) International trade has no impact on income distribution.
D) The unimportance of economies of scale as a cause of trade.
E) Companies tend to export goods in which they have a relatively high level of productivity.

Question

Quizplus · Accepted Answer

The Ricardian model of international trade, which focuses on comparative advantage, suggests that countries will specialize and export goods in which they have a relatively higher productivity compared to other countries. This has been supported by empirical evidence showing that countries tend to export goods in which they are relatively more efficient or productive.

Which of the Following Has Been Confirmed by Empirical Tests