📊 International Economics
Q. In the Ricardian model, when two countries trade freely, the relative price of the goods they are trading is determined by:
  • (A) Relative demand and relative supply for each trading country.
  • (B) Relative demand and relative supply on the world market.
  • (C) Relative opportunity costs in the two countries.
  • (D) Relative wages.
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✅ Correct Answer: (B) Relative demand and relative supply on the world market.

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