Suppose that there are two factors,capital and land,and that the United States is relatively land endowed while the European Union is relatively capital-endowed.According to the Heckscher-Ohlin model
A) European capitalists should support U.S.-European free trade.
B) European landowners should support U.S.-European free trade.
C) all capitalists in both countries should support free trade.
D) all landowners should support free trade.
E) the U.S. should compensate European countries once trade commences.

Question

Quizplus · Accepted Answer

According to the Heckscher-Ohlin model, countries will export goods that use their abundant factors intensively. The European Union, being capital-endowed, will benefit from exporting capital-intensive goods, which would be supported by European capitalists.

Suppose That There Are Two Factors,capital and Land,and That the United