Real GDP fluctuates from year to year but is always below potential GDP

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods

A) reap all of the gains from trade when it trades with B) grow slower than C) reap fewer of the gains from trade when it trades with D) specialize in producing capital goods and trade with

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.