This theory explains the observed patterns of international trade by emphasizing the interplay between the proportions in which the factors of production are available in different countries and the proportions in which they are needed for producing particular goods.

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The theory that explains the observed patterns of international trade by emphasizing the interplay between the proportions in which factors of production are available and the proportions in which they are needed for producing particular goods is known as the Heckscher-Ohlin theory. This theory suggests that countries will specialize in producing goods that utilize their abundant factors of production and import goods that require factors that are scarce in their economy.

This Theory Explains the Observed Patterns of International Trade by Emphasizing