Question

Ricardian theory assumes perfect mobility of labour
(a) within the country (b) between the countries
(c) both within and between the countries​

Answer 1

Explanation:

The answer is:--

(c) both within and between the countries

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Answer 2

Ricardian theory assumes perfect mobility of labour (c) both within and between the countries​.

Explanation:

• Labor is homogeneous within a country, while productivity varies across borders.
• This implies that different countries' production technologies are expected to differ.
• Labor is easily movable among industries within a country but static across borders.
• Labor is likewise expected to be fully employed. Ricardian equivalence is an economic theory that states that funding government spending with current or future taxes (including current deficits) has the same overall effect on the economy.