The Heckscher-Ohlin model predicts all of the following EXCEPT
A) the volume of trade.
B) which country will export which product.
C) which factor of production within each country will gain from trade.
D) that relative wages will tend to become equal in both trading countries.
E) that trade increases a country's overall welfare.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model does not predict the volume of trade; it focuses on the patterns of trade based on factor endowments and the effects on income distribution within countries.

The Heckscher-Ohlin Model Predicts All of the Following EXCEPT