D etermine whether the following statements are TRUE or FALSE . 1 . T he mercantilist theory is based on the idea that international trade is detrimental to the economy. 2 . Hume, Smith and Ricardo argued that international trade would bring about bene fits for all nations engaged in trade. 3 . In around 1800, most people believed that increased supply of gold would not stim ulate the economy. 4 . Smith and Ricardo argued for a reduction of international trade barriers to promote trade. 5 . According to absolute model, each country should specialize in and supply the products where it has an absolute advantage. 6 . Ricardo developed the comparative cost model which also advocated free trade. 7 . According to HOS model, free trade influences prices which will help strengthen the competitiveness of a nation. 8 . Leontief said that raw materials imported into the U. S. are labor intensive prod ucts. 9 . The HOS model assumes that if a product is labor intensive in one country, it is al so labor intensive in another country. 10. n modern international trade theories, the concept of economy of scale was put forward in contrast to the traditional assumption of constant returns to scale.