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Even If We Relax the Assumptions of the Simple Ricardian

Question 69

Multiple Choice

Even if we relax the assumptions of the simple Ricardian model that there are constant returns to scale and realistically assume diminishing returns to specialization,it can still be concluded that:


A) the benefits of unrestricted trade do not hold.
B) free trade is beneficial but the gains may not be as great as in a constant returns case.
C) governments should intervene in the market to bring about a zero-sum game.
D) the benefits of free trade are comparatively much less than government-regulated trade.

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