2. Briefly explain why the specific factors model is often considered a 'short-run' model. Give an example of a situation where it may also be valid for the 'long-run'.
2. Briefly explain why the specific factors model is often considered a 'short-run' model. Give an example of a situation where it may also be valid for the 'long-run'.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Briefly explain why the specific factors model is often considered a 'short-run' model. Give an example of a situation where it may also be valid for the 'long-run'.
3. Briefly and intuitively explain the mechanisms and main results of the Heckscher-Ohlin Model.
4. In the context of the Heckscher-Ohlin Model, briefly explain Leontief's Paradox and give examples of how the model can be reconciled with his finding.
5. Why is the bilateral trade balance not necessarily a good measure of the trade relationship between two countries?
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