A significant portion of actual world trade patterns results from ?
Correct answer: C. different factor endowment between countries
- A. The industrial policies of governments
- B. different sizes of the countries
- C. different factor endowment between countries
- D. the different tastes and preferences of people in different countries
Explanation
Differences in factor endowments, such as land, labour, capital and natural resources, create different production costs and help explain actual trade patterns. Differences in tastes also matter, but factor endowments are the standard major explanation here.
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