Assume that the U.S. is labor abundant relative to Japan and that Japan is capital abundant relative to the U.S. What does this mean for international trade between the two countries?

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The Answer is The factor-proportions theory states that a country has a comparative advantage in, and exports, the good that intensively uses the country's abundant factor of production. The U.S. will have a comparative advantage in labor-intensive goods and Japan will be a comparative advantage in capital-intensive goods.

Assume That the U