A country's effective factor endowment is defined as its:
A)actual factor endowment times factor productivity.
B)actual factor endowment times GDP.
C)effective factor endowment times factor productivity.
D)actual factor endowment divided by its factor productivity.

Question

Quizplus · Accepted Answer

Effective factor endowment takes into account both the actual factor endowment (i.e. the amount of land, labor, and capital a country has) and the factor productivity (i.e. how efficiently those resources are used). Thus, it is calculated by multiplying the actual factor endowment by the factor productivity, which gives us the effective factor endowment.

A Country's Effective Factor Endowment Is Defined as Its