Discuss what would be your prediction of the patterns


Foreign and Home are two identical countries except that people in Home work twice as hard of those in Foreign. Each has two industries (Shoe and Steel industries), where steel production is capital intensive and shoe production is labor intensive. Under the standard Hucksters-Ohlin model with two factors of production (L, K), discuss what would be your prediction of the patterns of trade among these two countries? Discuss what do we know about wage rates before and after trade in these two countries?

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Macroeconomics: Discuss what would be your prediction of the patterns
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