The Leontieff Paradox
A) failed to support the validity of the Heckscher-Ohlin model.
B) supported the validity of the Ricardian theory of comparative advantage.
C) supported the validity of the Heckscher-Ohlin model.
D) failed to support the validity of the Ricardian theory.
E) proved that the U.S. economy is different from all others.

Question

Quizplus · Accepted Answer

The Leontieff Paradox provided evidence contradicting the predictions of the Heckscher-Ohlin model, which suggested that countries with abundant capital would export capital-intensive goods and import labor-intensive goods. However, Leontieff found that the U.S. was exporting labor-intensive goods and importing capital-intensive goods, which was opposite to the predictions of the model. Thus, the Leontieff Paradox failed to support the validity of the Heckscher-Ohlin model.