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New Trade Theories Added to the Old Theories
New trade theories added to the old theories.
Modern economists has contribute more on old theories to make the theory of international trade more better and realistic. In his theory, David Ricardo depended on the restrictive assumption of the labor theory of value, in which labor was assumed to be the only factor input. But, modern economists believe that there are several other factor inputs and labor is only one of them. So they provide with a more generalized theory of comparative advantage by using "production possibilities schedule". …
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