The Heckscher-Ohl in model rules out the classical model's basis for trade by assuming that _________ is (are) identical between countries?
Correct answer: C. technology
- A. factor endowments
- B. factor intensities
- C. technology
- D. opportunity costs
Explanation
The Heckscher-Ohlin model removes technology differences as the main source of trade by assuming countries have identical production technologies, while factor endowments differ. Comparative advantage then arises from those differing endowments.
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