Economics · International Trade

Which of the following statements are correct regarding the Factor-Price Equalization Theorem? 1. It postulates that trade will lead to the elimination of pre-trade differences in relative and absolute factor prices between nations. 2. It postulates that trade will lead to the reduction in the pre-trade differences in relative and absolute factor prices between nations. 3. It postulates that each nation will export the commodity intensive in its relatively abundant and cheap factor. 4. It postulates that each nation will import the commodity intensive in its relatively scarce and expensive factor.