The comparative advantage model of Ricardo was based on ?
Correct answer: B. interindustry specialization and trade
- A. intraindustry specialization and trade
- B. interindustry specialization and trade
- C. demand conditions underlying specialization and trade
- D. income conditions underlying specialization and trade
Explanation
Ricardo's model explains trade through differences in labor productivity and comparative advantage across industries, producing interindustry specialization. Intraindustry trade is associated with models based on scale economies and product differentiation.
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