The basic factor-proportions theory indicates that nations gain by producing and exporting items in which they have a relative abundance of the factor of production required more intensively in production of those items.

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The basic factor-proportions theory, also known as the Heckscher-Ohlin theory, states that countries will export goods that use their abundant factors of production more intensively and import goods that use their scarce factors of production more intensively.

The Basic Factor-Proportions Theory Indicates That Nations Gain by Producing