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(Solved): Evaluate the following statement. True or False: The specific-factors theory suggests that import-co ...



Evaluate the following statement. True or False: The specific-factors theory suggests that import-competing industries experience a decrease in incomes as a result of trade, while export-competing industries experience an increase in incomes as a result of trade. True False Suppose that as the U.S. starts trading, the price of aircraft (capital intensive good) increases by 6% and the price of textiles (labor intensive good) decreases by 3%. According to the specific-factors theory, the price of capital will , and capital is a resource specific to an industry, and the price of labor will , and labor is a resource specific to an industry. In this scenario, are better off whereas are worse off.



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