The Heckscher- Ohlin Model Predicts All of the Following EXCEPT

question 38

Multiple Choice

The Heckscher- Ohlin model predicts all of the following EXCEPT

• A)which country will export which product.
• B)that trade increases a country's overall welfare.
• C)that relative wages will tend to become equal in both trading countries.
• D)which factor of production within each country will gain from trade.
• E)the volume of trade.

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Definitions:

Refining Technology

The process and technology improvements involved in purifying raw materials, particularly in converting crude oil into gasoline, diesel, and other petroleum products.

Consumers' Income

The total amount of income available to consumers for spending and saving after income taxes have been accounted for.

Equilibrium Price

The market price where the supply of goods matches demand.

Equilibrium Quantity

The amount of goods or services supplied and demanded at the equilibrium price.