In which of the following ways is the theory of comparative advantage linked to the Heckscher-Ohlin theory?
A) Sustainability of wealth in the short run
B) Dynamic changes in the patterns of trade over time
C) Dependency on a nation's locally available abundant factors
D) Extent to which government influences international trade

Question

In which of the following ways is the theory of comparative advantage linked to the Heckscher-Ohlin theory? 
A) Sustainability of wealth in the short run 
B) Dynamic changes in the patterns of trade over time 
C) Dependency on a nation's locally available abundant factors 
D) Extent to which government influences international trade

Quizplus · Accepted Answer

The theory of comparative advantage and the Heckscher-Ohlin theory are linked through the concept of a nation's locally available abundant factors. The Heckscher-Ohlin theory explains that a country will export goods that use its abundant factors of production more intensively and import goods that use its scarce factors more intensively. This idea complements the theory of comparative advantage, which states that countries should specialize in producing goods in which they have a comparative advantage. Together, both theories emphasize the importance of a country's factor endowment in determining its trade patterns. The other choices are not relevant to the link between these two theories.

In Which of the Following Ways Is the Theory of Comparative