The Heckscher­Ohlin Model Assumes That There Are Two

question 21

Multiple Choice

The Heckscher­Ohlin model assumes that there are two
Countries, each of which produces two goods (say
Manufactures and agriculture) using labor and capital.
Which of the following is an additional assumption of the
Heckscher­Ohlin model?

• A)The ratio of the quantity of labor to the quantity of capital is different for each nation, resulting in different
• "endowments" of capital and labor.
• B)One nation has larger quantities of both capital and labor than the other country.
• C)Capital is a specific resource in producing manufactured goods, and labor is a specific resource in producing
• Agricultural goods in each country.
• D)Labor and capital can move between countries.

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Definitions:

Employment Contract

A formal agreement between an employer and an employee outlining the terms of employment, including duties, compensation, and duration.

Age of Majority

The legally recognized age at which an individual is considered an adult, capable of voting, entering into contracts, and enjoying other civil rights.

Usury

The practice of charging excessive or illegally high interest rates on loans.

Legal Exceptions

Provisions or circumstances that alter the application of laws in specific cases, often providing exemptions from certain legal requirements.