According to the Heckscher-Ohlin Theory, ______ is (are) the major determinant(s) of comparative advantage.
A) research and development
B) innovation
C) resource endowments
D) acquired advantages in labor productivity

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin Theory states that comparative advantage is determined by a country's resource endowments, particularly in terms of capital, labor, and natural resources. This means that countries will specialize in producing and exporting goods that use their abundant resources and import goods that use their scarce resources. Therefore, the major determinant of comparative advantage is resource endowments. Research and development and innovation may contribute to a country's competitiveness, but they are not considered the major determinant of comparative advantage according to this theory. Acquired advantages in labor productivity may be a result of a country's efficient use of its resources, but they are not the major determinant of comparative advantage.

According to the Heckscher-Ohlin Theory, ______ Is (Are) the Major