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Indeed, many economists of the classical school have explained the rise of BPO using this principle. Thus as we see in the explanation of the theory, according to the theory, if a particular thing is outsourced or traded away to some other country, it must be replaced by something better than it.
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The theory of ?comparative advantage' rests on the basic presumption that capital, labor and technology cannot move offshore. The theory was propounded nearly two centuries ago, when this could be taken to be a very reasonable assumption and therefore there was no harm in actually developing the theory around the basis of this assumption, which is exactly what Ricardo did...
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