One reason used to explain the Leontief paradox observed in the case of the United States is that the United States
A) imports goods that heavily use skilled labor and innovative entrepreneurship.
B) has a special advantage in producing new products made with innovative technologies.
C) exports heavy manufacturing products that use large amounts of capital.
D) has a strong absolute advantage over other nations because of its advantageous factor endowments.
E) imports goods that make intensive use of factors that are locally abundant.

Question

Quizplus · Accepted Answer

The Leontief paradox suggests that the U.S., despite being capital-abundant, exports labor-intensive goods. One explanation is that the U.S. has a special advantage in producing new products with innovative technologies, which may not necessarily be capital-intensive.

One Reason Used to Explain the Leontief Paradox Observed in the Case