The Theory Which Predicts That Trade Occurs Because of Differences

question 35

Multiple Choice

The theory which predicts that trade occurs because of differences in the availability of inputs across countries and the differences in the proportions in which the inputs are used in producing different products is called:

• A)the Stolper-Samuelson theory.
• B)the Heckscher-Ohlin theory.
• C)the theory of comparative advantage.
• D)the theory of absolute advantage.

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