If Brazil is a labor abundant country, then international trade would tend to:

Question

Quizplus · Accepted Answer

According to the Heckscher-Ohlin model of international trade, a country will export goods that make intensive use of the country's abundant factor and import goods that make intensive use of the country's scarce factor. For a labor-abundant country like Brazil, international trade should increase the demand for labor, potentially increasing wages or employment (or both) for labor, and thus not necessarily making Brazil poorer, decreasing the welfare of labor, or increasing the welfare of the owners of capital in a way that would decrease overall welfare. Therefore, none of the provided options accurately describe the expected outcome of international trade for Brazil based on this theory.

If Brazil Is a Labor Abundant Country, Then International Trade