Draw for Nation 2 a figure analogous to the top panel of Figure 7.5 under the following

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Draw for Nation 2 a figure analogous to the top panel of Figure 7.5 under the following assumptions:
(a) Nation 2 is now large enough to affect the relative commodity prices at which it trades.
(b) The terms of trade of Nation 2 deteriorate from PY / PX = 1 with free trade before growth to PY / PX = 1/2 with growth and free trade.
(c) Nation 2 exports 140Y with growth and free trade.
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International Economics

ISBN: 978-1119915737

11th edition

Authors: Dominick Salvatore

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