Empirical tests of the HO model have had mixed results. One explanation for this is that
A) the Ricardian model is more detailed.
B) it is difficult to measure factor endowments.
C) it does not explain the effects of trade on income.
D) it assumes that countries have different technologies.
B
You might also like to view...
If the present value equation used to calculate the price of a stock you are considering buying is "[$7 / (0.04 - 0.03)]," which of the following is correct, assuming that dividends will grow at a constant rate?
A) The stock price is $7, the dividend growth rate is 3 percent, and the interest rate is 1 percent. B) The stock price is $700, the dividend growth rate is 3 percent, and the interest rate is 4 percent. C) The dividend is $7 per share, the dividend growth rate is 1 percent, and the interest rate is 4 percent. D) The dividend is $7 per share, the dividend growth rate is 4 percent, and the interest rate is 3 percent.
An investment tax credit effectively ________ the user cost of capital, and thus ________ gross investment
A) lowers, raises B) lowers, lowers C) raises, raises D) raises, lowers