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factor-price equalization theorem [1 record]

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Record 1 2007-05-17

English

Subject field(s)
  • Economic Doctrines, Systems and Policies
  • Foreign Trade
DEF

Simply stated, the theorem says that when the prices of the output goods are equalized between countries as they move to free trade, then the prices of the factors (capital and labor) will also be equalized between countries.

CONT

The factor-price equalization theorem holds that international trade will bring about equalization in the relative and absolute returns to homogeneous factors of production across countries.

French

Domaine(s)
  • Doctrines, systèmes et politiques économiques
  • Commerce extérieur
CONT

Selon le théorème de l'égalisation des prix des facteurs de production, le commerce international permettra d'égaliser les rendements relatifs et absolus de facteurs de production homogènes entre les pays.

Spanish

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