The Heckscher-Ohlin model predicts all of the following EXCEPT
A) that relative wages will tend to become equal in both trading countries.
B) which factor of production within each country will gain from trade.
C) which country will export which product.
D) that trade increases a country's overall welfare.
E) the volume of trade.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model focuses on predicting the patterns of trade, the distribution effects within countries, and the impact on factor prices and overall welfare due to trade. It does not specifically predict the volume of trade, which is determined by a range of other factors including demand, supply, and trade barriers.

The Heckscher-Ohlin Model Predicts All of the Following EXCEPT