Basic economic laws


One of the basic economic laws is ‘the law of one price.' It says that given certain assumptions one would expect that if the free trade is allowed, the price of goods in countries should converge. a. Can you list what three of those assumptions likely are? b. Should the law of one price hold for labor also? Why or why not? c. Should it hold for capital more or less so than for labor? Why?

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Macroeconomics: Basic economic laws
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