Which of the following is an empirically supported prediction of the n

QUESTION

Which of the following is an empirically supported prediction of the new trade theory?

A. Trade increases the specialization of production within an industry.

B. Nations benefit from trade only when they differ in factor endowments.

C. Government intervention and strategic trade policies are more likely to harm international trade than is free trade.

D. The locus of global production initially switches from the United States to other advanced nations.

E. Comparative advantage arises from differences in productivity and factor endowments.

ANSWER

A