Which of the following predicts that countries will export those goods that make intensive use of factors that are locally abundant,while importing goods that make intensive use of factors that are locally scarce?

Question

Quizplus · Accepted Answer

Heckscher-Ohlin theory, also known as factor proportions theory, predicts that countries will export goods that make intensive use of factors that are locally abundant (have relatively lower costs) and import goods that make intensive use of factors that are locally scarce (have relatively higher costs). This is driven by the idea that countries have different factor endowments, meaning they have varying amounts of labor, capital, and natural resources available to them, which influences their comparative advantage in producing certain goods.

Which of the Following Predicts That Countries Will Export Those