New Click here to Enroll in NaBFID Analyst Intro Class on May 6

    Question

    What is the basis of international trade in the

    Heckscher-Ohlin model?
    A Factor Endowments Correct Answer Incorrect Answer
    B Factor Intensity Correct Answer Incorrect Answer
    C Metzler Paradox Correct Answer Incorrect Answer
    D None of these Correct Answer Incorrect Answer
    E All of these Correct Answer Incorrect Answer

    Solution

    Factor Endowments is the basis of international trade for a country in case of Heckscher Ohlin Model. The model essentially says that countries export the products which use their relatively abundant and cheap factors of production, and import the products which use the countries' relatively scarce factors.

    Practice Next