The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?
Correct answer: B. Relative abundance of various resources
- A. Economies of large-scale production
- B. Relative abundance of various resources
- C. Relative costs of labor
- D. Research and development expenditures
Explanation
Heckscher-Ohlin explains comparative advantage through differences in the relative abundance of productive factors such as land, labour, and capital. Countries export goods that intensively use their relatively abundant resources.
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