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International Trade and the Principle of Comparative Advantage


1. Are the gains from international trade necessarily positive in aggregate? Or does the answer depend upon which country we are trading with? 2. What are the underlying economic factors that give rise to gains from trade? 3. Why is it only differences in the price ratio across countries that matter for trade,rather than differences in the absolute level of prices? 4. If the gains from (international) trade are necessarily positive in aggregate, why is trade so often strongly opposed?

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MIT

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