Question

The Nobel Prize-winning economist Paul Samuelson argued that contrary to the standard interpretation, in certain circumstances the theory of comparative advantage predicts that a rich country might actually be worse off by switching to a free trade regime with a poor nation

A. True
B. False

Answer 1

Paul samuelson argued that contrary to the standard interpretation, in certain circumstances the theory of comparative advantage predicts that a rich country might actually be worse off by switching to a free trade regime with a poor nation.

So the correct anwer is A. True

Step-by-step explanation:

Paul Samuelson was an American economist called by the Swedish Academy as the American economist that contributed more to science than anyone else. He deduced that if a free trade deal would be pursued by a rich and a poor country, the one that would perform better would be the poor country because the currency exchange, the tariffs, the costs of production and the competence would make the poor country's products more attractive than the rich country ones.

Answer 2

True

Step-by-step explanation:

The theory by Paul Samuelson postulated that trade liberalisation makes a rich country worse off when trading with a poor country.

Paul Samuelson being the American that won the Nobel Peace Prize in Economics, was also called the Father of Modern Economics.

He authored the best-selling economics textbook: Economics: An Introductory Analysis, which is considered an authority in Keynesian Economics.