The factor endowment theory suggests that:

Question

Quizplus · Accepted Answer

The factor endowment theory suggests that a nation's resource endowments are the foundation for its comparative advantages in international trade. This means that countries are more likely to specialize in producing and exporting goods that utilize their abundant resources, while importing goods that require resources they lack. This leads to trade patterns based on comparative advantage, which improves overall prosperity for all participating countries.

The Factor Endowment Theory Suggests That