In the text, which of the following statements is NOT an assumption of the Heckscher-Ohlin model?
A) There are two countries, each of which produces two goods using labor and capital.
B) Labor and capital can move freely between the production of two goods.
C) There is free trade between the two countries.
D) Labor and capital can move freely between the two countries.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model doesn't assume that labor and capital can move freely between the two countries. In fact, it assumes that factors of production (such as labor and capital) are immobile between countries.

In the Text, Which of the Following Statements Is NOT