The HO model rules out the classical model's basis for trade by assuming that ________ is (are)identical between countries.
A)factor endowments
B)factor intensities
C)technology
D)opportunity costs

Question

Quizplus · Accepted Answer

The HO (Heckscher-Ohlin) model assumes that technology is identical between countries, differing from the classical model by focusing on differences in countries' factor endowments (labor, land, capital) as the basis for trade.

The HO Model Rules Out the Classical Model's Basis for Trade