INTERNATIONAL TRADE

Q3. For each statement below, determine whether it is true/false/uncertain and briefly explain your answer. According to the Hecksher-Ohlin model, countries with a large labor force, will always export goods which are labor-intensive. An increase in the wage rate, holding the price of capital fixed, increases the capital intensity of production in all sector of the economy. In the specific factors model with mobile labor, wages must be equal in both sectors