According to the factor price equalization theorem,a nation that has a relative capital abundance should specialize in goods that are ______ intensive resulting in an increase in the price of ______.
A) capital; capital
B) capital; labor
C) labor; capital
D) labor; labor

Question

Quizplus · Accepted Answer

According to the factor price equalization theorem, a nation with a relative abundance of capital should specialize in capital-intensive goods, which increases the demand and price of capital.

According to the Factor Price Equalization Theorem,a Nation That Has