International trade tends to raise the amount of national income received by the scarce factor of production.

Question

Quizplus · Accepted Answer

International trade tends to benefit the abundant factor of production in a country, according to the Heckscher-Ohlin theorem, rather than the scarce factor. This is because countries tend to export goods that use their abundant factors intensively, increasing demand for these factors and thus their income.

International Trade Tends to Raise the Amount of National Income