The Heckscher-Ohlin Theory ________

question 32

Multiple Choice

The Heckscher-Ohlin theory ________.

• A) suggests that a country should export those goods for which it is more productive than other countries and trade for those goods for which other countries are more productive
• B) states that a country should produce and export those goods for which it is relatively more productive than other countries and import those goods for which other countries are relatively more productive than it is
• C) suggests that a country will have a comparative advantage in producing products that intensively use resources it has in abundance
• D) argues that most trade in manufactured goods should be between countries with similar per capita incomes

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, factoring in both interest payments and the capital gain or loss realized upon maturity.

Coupon Rate

The interest rate that an issuer of a bond or other fixed-income security agrees to pay to the bondholder annually, expressed as a percentage of the bond's face value.

Every Three Months

A quarter-yearly interval, commonly used in the context of financial payments, reporting periods, or other scheduled events.

Coupon Payments

Regular interest payments made to bondholders as compensation for the investment and loan of capital.