According to the_________________ model,returns on capital are originally higher in the nation having the ___________ overall relative capital-labor ratio.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model posits that a country will export goods that make intensive use of the country's abundant factor. Therefore, in a nation with a lower overall relative capital-labor ratio, returns on capital are initially higher due to its scarcity, leading to specialization in capital-intensive goods if capital is the scarce factor.

According to The_________________ Model,returns on Capital Are Originally Higher in the Nation