A large capital-abundant country trades two goods with the rest of the world, medical equipment and corn.
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Question:
A large capital-abundant country trades two goods with the rest of the world, medical equipment and corn. Medical equipment is relatively capital-intensive. An increase in the country’s endowment of capital will cause the price of medical equipment relative to the price of corn to:
Rise. | ||
Fall. | ||
Stay the same. | ||
Rise at first and then fall. |
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