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India is labour (L) abundant and the US is capital (K) abundant. The cut diamonds (C) Industry is L intensive while washing m
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Answer- The correct option is Pc/Pw will rise in both countries.

The given model explains that if a country A has scarcity of a specific resources, it imports it from the country B which is abundant in that resources. Similarly, the country B which is exporting the resources, imports the resources from the country A in which country B lacks. This process opens the door for both the countries and encourage them to manufacture the products which they could not due to non availability of resources. When both the countries exchange resources the price of the products stabilise in both the countries and results in achieving equilibrium. Therefore both the countries India and USA will rise in both the industry.

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